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Maxim Integrated: An Attractive Buyout Target

Mar. 02, 2018 3:39 PM ETAnalog Devices, Inc. (ADI)3 Comments
Roman Luzgin profile picture
Roman Luzgin


  • Maxim Integrated stock has increased more than 36% over the last year since my last article on the company was published.
  • The corporation achieved solid results in Q2 FY 2018, demonstrating 13% revenue growth year-over-year.
  • Rumors suggest there is merger interest from certain companies, which is likely to drive the stock higher.
  • The corporation is reasonably valued and pays decent dividends, which makes it attractive for investment.

The undercovered semiconductor corporation

Maxim Integrated Products (MXIM) is one of the semiconductor corporations that deliver strong results but still remain relatively undercovered. My last article on the company was written at the end of April 2017, and since then only three more articles were devoted to MXIM. At the same time, the stock has risen more than 36% over the last year, which beats the performance of the broad market and goes in-line with the return of the semiconductor index (SOXX) without accounting for dividends.

ChartMXIM data by YCharts

The YTD results are even more representative - the return for MXIM stock amounted to solid 16.5%, while the SOXX index increased by 7.2% and S&P 500 rose by only 0.3%.

ChartMXIM data by YCharts

Decent Q2 results, promising guidance provide boost for the stock

On January 25, Maxim reported its results for the quarter ended December 2017, beating on revenue. The growth in sales is accelerating at a rapid pace, which is likely to continue in the near future, according to the corporation's guidance.

Here is the history of MXIM's earnings over the last 13 quarters.

(Source: Seeking Alpha)

And here is how the growth trend looks like.

(Source: the author's calculations)

Revenue for the second quarter amounted to $623 million, up 13% from the same quarter a year ago. This was $2 million higher than expected by the analysts.

(Source: Earnings Slides)

The automotive continued to be one of the strongest segments of the company, as it was stated during the earnings call the division grew double-digits in December quarter. In my previous article, I stated that the automotive market was a catalyst for growth for MXIM, and it is clear that this continues to be true. The corporation clearly profits from the autonomous driving trend, and I expect this will boost

ChartMXIM Operating Margin (TTM) data by YCharts

ChartMXIM EV to EBITDA (Forward) data by YCharts

This article was written by

Roman Luzgin profile picture
I write about growth opportunities in different sectors related to technology, providing analyses of fundamentals that are driven by current and future trends. Senior Data Analyst by day, I am building and managing my own portfolio of tech-related securities, which to date has consistently beaten the market.

Analyst’s Disclosure: I am/we are long AMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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