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There are tens if not hundreds of options in deciding how to look at a company’s profitability. One interesting option is comparing a company’s profitability margins to industry peers. Companies with higher margins are keeping a greater percentage of sales as profits, and they also have more control over their cost structure.

To illustrate this idea, we ran a screen on semiconductor stocks from the tech sector for those with high profitability, beating their industry peers on gross, operating, and pretax margins.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. (To access a complete analysis of this list's recent performance, click here.)

Do you think these companies have strong profitability? Use this list as a starting point for your own analysis.

List sorted by difference between gross margin and industry average.

1. CEVA Inc. (CEVA): Engages in designing and licensing silicon intellectual property for the handsets, portable multimedia, and consumer electronics markets. Market cap of $719.78M. TTM gross margin at 94.10% vs. industry gross margin at 59.57%. TTM operating margin at 30.36% vs. industry operating margin at 25.01%. TTM pretax margin at 34.81% vs. industry pretax margin at 24.46%. The stock is a short squeeze candidate, with a short float at 14.85% (equivalent to 14.88 days of average volume). The stock has had a good month, gaining 14.66%.

2. Linear Technology Corp. (LLTC): Designs, manufactures, and markets a line of linear integrated circuits. Market cap of $7.20B. TTM gross margin at 81.16% vs. industry gross margin at 59.86%. TTM operating margin at 50.54% vs. industry operating margin at 25.33%. TTM pretax margin at 47.82% vs. industry pretax margin at 24.59%. The stock has gained 3.23% over the last year.

3. EZchip Semiconductor Ltd. (EZCH): Engages in the development and marketing of Ethernet network processors for networking equipment. Market cap of $851.18M. TTM gross margin at 77.72% vs. industry gross margin at 59.57%. TTM operating margin at 33.61% vs. industry operating margin at 25.01%. TTM pretax margin at 35.83% vs. industry pretax margin at 24.46%. The stock has had a couple of great days, gaining 6.72% over the last week.

4. Hittite Microwave Corporation (HITT): Designs and develops integrated circuits, modules, and subsystems for technically demanding radio-frequency, microwave, and millimeter-wave applications. Market cap of $1.69B. TTM gross margin at 75.52% vs. industry gross margin at 59.57%. TTM operating margin at 47.77% vs. industry operating margin at 25.01%. TTM pretax margin at 48.01% vs. industry pretax margin at 24.46%. The stock is a short squeeze candidate, with a short float at 6.92% (equivalent to 8.22 days of average volume). The stock has gained 1.25% over the last year.

5. Intel Corporation (INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap of $126.99B. TTM gross margin at 74.58% vs. industry gross margin at 59.57%. TTM operating margin at 34.45% vs. industry operating margin at 25.01%. TTM pretax margin at 33.66% vs. industry pretax margin at 24.46%. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.37%, current ratio at 2.24, and quick ratio at 1.91. The stock has gained 22.5% over the last year.

6. Altera Corp. (ALTR): Designs, manufactures, and markets programmable logic devices (plds); structured application-specific integrated circuit devices; predefined design building blocks or intellectual-property cores; and associated development tools. Market cap of $11.70B. TTM gross margin at 72.06% vs. industry gross margin at 59.86%. TTM operating margin at 44.11% vs. industry operating margin at 25.33%. TTM pretax margin at 44.07% vs. industry pretax margin at 24.59%. Might be undervalued at current levels, with a PEG ratio at 0.92, and P/FCF ratio at 14.04. The stock has gained 13.05% over the last year.

7. Analog Devices Inc. (ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap of $10.94B. TTM gross margin at 70.93% vs. industry gross margin at 59.57%. TTM operating margin at 36.84% vs. industry operating margin at 25.01%. TTM pretax margin at 36.71% vs. industry pretax margin at 24.46%. The stock has gained 10.56% over the last year.

8. Maxim Integrated Products Inc. (MXIM): Designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits worldwide. Market cap of $7.84B. TTM gross margin at 69.63% vs. industry gross margin at 59.57%. TTM operating margin at 27.76% vs. industry operating margin at 25.01%. TTM pretax margin at 26.37% vs. industry pretax margin at 24.46%. The stock has gained 24.51% over the last year.

9. SanDisk Corp. (SNDK): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap of $12.27B. TTM gross margin at 46.96% vs. industry gross margin at 41.90%. TTM operating margin at 28.0% vs. industry operating margin at 24.02%. TTM pretax margin at 25.98% vs. industry pretax margin at 23.86%. Might be undervalued at current levels, with a PEG ratio at 0.64, and P/FCF ratio at 11.79. The stock has gained 34.64% over the last year.

10. Xilinx Inc. (XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. Market cap of $8.58B. TTM gross margin at 66.92% vs. industry gross margin at 59.86%. TTM operating margin at 31.03% vs. industry operating margin at 25.33%. TTM pretax margin at 29.06% vs. industry pretax margin at 24.59%. The stock has gained 25.2% over the last year.

11. Rubicon Technology, Inc. (RBCN): Develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes, radio frequency integrated circuits, blue laser diodes, optoelectronics, and other optical applications. Market cap of $256.85M. TTM gross margin at 65.65% vs. industry gross margin at 59.86%. TTM operating margin at 48.86% vs. industry operating margin at 25.33%. TTM pretax margin at 49.10% vs. industry pretax margin at 24.59%. The stock is a short squeeze candidate, with a short float at 24.57% (equivalent to 11.64 days of average volume). The stock has had a good month, gaining 16.6%.

12. Microchip Technology Inc. (MCHP): Develops and manufactures semiconductor products for various embedded control applications worldwide. Market cap of $7.0B. TTM gross margin at 63.96% vs. industry gross margin at 59.57%. TTM operating margin at 31.25% vs. industry operating margin at 25.01%. TTM pretax margin at 29.98% vs. industry pretax margin at 24.46%. The stock is a short squeeze candidate, with a short float at 11.48% (equivalent to 7.61 days of average volume). The stock has gained 14.15% over the last year.

Profitability data sourced from Fidelity; all other data sourced from Finviz.

Source: 12 Semiconductor Stocks With Impressive Profitability