FAST Graphs At-A-Glance

Articles which show the principles for reading and analyzing FAST Graphs At-A-Glance.

Five Tech Stocks with the Added Benefit of Dividends

FAST Graphs - Friday, June 08, 2012

 

Here are five technology-oriented companies that are currently trading at a price earnings ratio that implies that the stocks are attractively valued.  Each of these five companies currently offers a dividend yield that is above-average as represented by the S&P 500.

The following table summarizes five technology-oriented companies that appear to be attractively valued, and lists them in order of dividend yield highest to lowest. From left to right, the table shows the company's stock symbol and name. Next the company's historical EPS growth followed by the estimated EPS growth. Next you will find the current PE ratio followed by the historical normal PE ratio for perspective. Then the 5-year estimated annual total return, followed by dividend yield for each company. The final three columns show the company sector, debt, and its market cap.

 

A Closer Look at the Past and the Future Potential

Since a picture is worth 1,000 words, we’ll take a closer look at the past performance and future potential of each of our five candidates through the lens of F.A.S.T. Graphs™.

Earnings Determine Market Price: The following earnings and price correlated historical graphs clearly illustrates the importance of earnings. The Earnings Growth Rate Line or True Worth™ Line (orange line with white triangles) is correlated with the historical stock price line. On graph after graph the lines will move in tandem. If the stock price strays away from the earnings line (over or under), inevitably it will come back to earnings. The historical normal PE ratio line (dark blue line with*) depicts a PE ratio that the market has historically applied.

The orange True Worth™ line and the blue normal PE ratio line provide perspectives on valuation.  The orange line reflects the fair value of each company’s earnings relative to its growth rate achievement, and the blue line reflects how the market has traditionally valued the company’s stock relative to its fair value. The blue line represents a trimmed historical normal PE ratio (the highest and lowest PEs are trimmed).  These lines should be viewed as barometers or aids for ascertaining sound buy, sell or hold decisions. Rather than seen as absolutes, they should be seen as guides to better thinking.

About Anixter Intl Inc (AXE):  Directly from their website

“Anixter International is a leading global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts. The company adds value to the distribution process by providing its customers access to 1) innovative inventory management programs, 2) more than 450,000 products and over $1 billion in inventory, 3) approximately 225 warehouses with 7 million square feet of space, and 4) locations in over 260 cities in more than 50 countries. Founded in 1957 and headquartered near Chicago, Anixter trades on the New York Stock Exchange under the symbol AXE.”

 

The consensus of 11 leading analysts reporting to Capital IQ forecast Anixter Intl Inc’s long-term earnings growth at 15%.  Anixter Intl Inc has medium long-term debt at 45% of capital. Anixter Intl Inc is currently trading at a P/E of 9.8, which is below the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Anixter Intl Inc’s True Worth™ valuation would be $184.43 at the end of 2017, which would be a 27.7% annual rate of return from the current price.

 

About Microchip Technology Inc (MCHP):  Directly from their website

“Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider of microcontroller, analog and Flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality.”

 

 

The consensus of 12 leading analysts reporting to Capital IQ forecast Microchip Technology Inc’s long-term earnings growth at 10%.  Microchip Technology Inc has low long-term debt at 15% of capital. Microchip Technology Inc is currently trading at a P/E of 17.5, which is inside the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Microchip Technology Inc’s True Worth™ valuation would be $49.96 at the end of 2017, which would be a 11.8% annual rate of return from the current price.

 

About Maxim Integrated Products (MXIM):  Directly from their website

“Maxim makes highly integrated analog and mixed-signal semiconductors. Maxim reported revenue of approximately $2.5 billion for fiscal 2011.”

 

 

The consensus of 28 leading analysts reporting to Capital IQ forecast Maxim Integrated Products’ long-term earnings growth at 11%.  Maxim Integrated Products has low long-term debt at 11% of capital. Maxim Integrated Products is currently trading at a P/E of 16.9, which is inside the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Maxim Integrated Products’ True Worth™ valuation would be $41.33 at the end of 2017, which would be a 13.1% annual rate of return from the current price.

 

About Linear Technology Corp (LLTC):  Directly from their website

“Linear Technology Corporation, a member of the S&P 500, has been designing, manufacturing and marketing a broad line of high performance analog integrated circuits for major companies worldwide for three decades. The Company’s products provide an essential bridge between our analog world and the digital electronics in communications, networking, industrial, automotive, computer, medical, instrumentation, consumer, and military and aerospace systems. Linear Technology produces power management, data conversion, signal conditioning, RF and interface ICs, μModule®subsystems, and wireless sensor network products.”

 

 

The consensus of 20 leading analysts reporting to Capital IQ forecast Linear Technology Corp’s long-term earnings growth at 10.5%.  Linear Technology Corp has high long-term debt at 61% of capital. Linear Technology Corp is currently trading at a P/E of 16.5, which is inside the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Linear Technology Corp’s True Worth™ valuation would be $47.86 at the end of 2017, which would be a 12.9% annual rate of return from the current price.

 

About Accenture (ACN):  Directly from their website

“Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011.”

 

 

The consensus of 24 leading analysts reporting to Capital IQ forecast Accenture’s long-term earnings growth at 11.8%.  Accenture has no debt. Accenture is currently trading at a P/E of 15.4, which is inside the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Accenture’s True Worth™ valuation would be $100.30 at the end of 2017, which would be a 13.1% annual rate of return from the current price.

 

Summary and Conclusions

We believe these tech stocks appear to look like they are at a valuation which warrants further research.  By quickly reviewing these companies through the lens of the FAST Graphs tool, the investor interested in dividend growth might want to consider adding an investment in the technology sector for an added benefit of growth.

Three out of five of these stocks have been overvalued and are moving into the range of valuation. Two of the stocks have been good investments and look to be slightly undervalued today.  As always, we recommend you conduct your own thorough due diligence.

Disclosure:  Long MCHP and ACN at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation. A comprehensive due diligence effort is recommended.

 

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The white paper also pointed out that, after detention should be immediately detained people sent to the detention center custody later than no more than 24 hours. Immediately after his arrest should be the person arrested, sent to the detention center custody investigators on interrogation of detainees should be carried out in the detention center, the implementation of audio and video recording in interrogation, detention, trial, regulatory sites. Full implementation of the investigation and interrogation process audio and video recording system, specified may be sentenced to life in prison, death penalty cases, or other major criminal cases, the interrogation process audio and video recording recording or video should be full to maintain integrity. Said the number of judicial reform As of the end of 5014, forensic institutions Forensic 52812. As of May this year, nearly 1400 Court set up a special trial management agencies, nearly 1600 Procuratorate set up a specialized case management agencies. People's jurors assessor last year the total number of cases of about 1,116,400, accounting for 46.5 of the cases of the first instance the ordinary procedure procuratorial organs supervise filing the 19786 and 39432 times put forward rectification opinions on the investigation of illegal. The end of last year, China's law firm 18,200, an increase of 31.6 over 2008 lawyer 21.5 million, which accounted for 89.6 percent of full-time lawyers handle lawsuits over 2,315,000 [url=http://lvbags.onshops8.com]http://lvbags.onshops8.com[/url], an increase of 17.7 over 2008 undertaking legal aid cases nearly 845,000, an increase of 54.5 over 2008. FFSDKA122F
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Simplify filing procedures followed to establish the court direct 'working mechanism to establish convergence contradiction litigation and non-litigation disputes yuan settlement mechanism, the formation of multi-level mediation, arbitration, litigation, resolve the contradictions of the multi-channel mechanism to effectively resolve conflicts and disputes in a timely manner, and The provisions of the Criminal Reconciliation System [url=http://lvoutlet.factorys8.com]http://lvoutlet.factorys8.com[/url], has entered the Criminal cases can also be reconciliation, strengthen the construction of information technology at the same time, the implementation of online booking filing information search, online approval, online office. Aspect One The standard uniform sentenced to death in the case to gradually reduce the Amendment to the Constitution, promulgated in 2004, the state respects and safeguards human rights into the Constitution. 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In 2008-2011, the national prosecutors through the supervision and inspection to correct illegal custody 5473 Detention Center Detention Center occurred in 2010, the number of accidents fell by 31.6. Aspect Two State compensation increased by 145.49 yuan a day The White Paper pointed out that, in recent years, the national standards for criminal compensation continue to improve with the economic and social development, violations of civil liberty rights daily compensation from 17.16 yuan in 1995, rose to 162.65 yuan in 2012. 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    “I appreciate your work, Chuck. As a subscriber to FAST Graphs™, I use the tool to decide on whether to purchase additional shares of what I currently hold or to add a new holding. Your articles help me make full use of the tool and give other readers valuable information, if they take the time to learn. One of the biggest enhancements that I use is the FFO data added for MLPs and REITs.”


    “When FAST Graphs™ were unavailable because of Hurricane Sandy, I realized how much I need them in order to make investment decisions.

    (Wish I could be) Long FAST Graphs!!!”


    “One more vote for the value of FAST Graphs™; just started a subscription to Chuck's great service (premium), and am having a ball analyzing so many stocks quickly.”


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    “Yesterday, I signed up for your F.A.S.T. Graphs™. It's a really amazing, valuable tool for checking over/undervaluation of stocks. Wish I had it years and years ago!!”


    “Love the F.A.S.T. Graphs™: One glance and you know a whole lot.”


    “About Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


    "Chuck -- Your proprietary F.A.S.T. Graphs™ are a VERY impressive tool!"


    “If there were an Investor Hall of Fame for people who have helped others with their investing, and sharing valuable information, you and your F.A.S.T. Graphs™ would get one of my selections.”


    “I love Chuck's F.A.S.T. Graphs™! Well worth the price of admission for what he gives you.”


    "Chuck - Thank you for your well thought out articles. I tend to be a visual type of person so I really appreciate the F.A.S.T. Graphs™ approach."


    "Great article, as always! I always look forward to your articles, and am especially eagerly awaiting your next in this series. I find the F.A.S.T. Graphs™ extremely helpful."


    “Your F.A.S.T. Graphs™ put all of this in a single artful picture and the accompanying spreadsheets hammer home the point.”


    “I use the F.A.S.T. Graphs™ method to evaluate all of my ideas. I recommend it for individual investors, since it helps them focus on data and get past the many emotional arguments.”


    “I recently subscribed to the F.A.S.T. Graphs™, and these articles are helping me learn how to better use them. They really do give you a good quick look at the valuations picture. A much needed tool!”


    “I also always appreciate the clear-cut information provided through your F.A.S.T. Graphs™ and articles.”


    “Thanks, Chuck, for your F.A.S.T. Graphs™. Each of these graphs is worth 1,000 words in describing a company's growth, consistency and valuation. Thanks for sharing your graphs.”


    “Thanks, Chuck. Love the F.A.S.T. Graphs™! It makes investing so much more clear.”


    “Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


    ”I am amazed at the usefulness of your F.A.S.T. Graphs™ and I plan on using them for a long time to come.”


    “Chuck's F.A.S.T. Graphs™ will give you a tool to find those well chosen stocks...”


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