Wednesday, March 21, 2012

Altera Corp (ALTR) 2012 Review


Altera Corp.(ALTR) is a global leader in the design and manufacture of high density programmable logic devices (PLD) and associated computer aided engineering logic development tools. 

Its products are utilized in the telecommunications, data communications, computers and industrial applications. The company has grown profits at an 8% pace over the last 10 years and its dividend at a 13% rate since its initiation in 2007; in addition, it has earned a 20-25% return on equity. ALTR experienced an earnings decline in 2009 but rebounded sharply in 2010 and should continue to grow as a result of:

(1) ALTR has technological advantage over its principal PLD rival via a newly developed, high performance application specific integrated circuit,

(2) its new generation of products carry higher margins and should add to earnings growth as they become a larger portion of the sales mix,

(3) the rollout of the third generation mobile networks in Asia will add significantly to profit expansion.

Negatives:

(1) profit margins are narrowing in its older product lines,

(2) global economic uncertainty could weaken demand for ALTR’s products.

Altera is rated A by Value Line, has no debt and its stock yields 0.9%

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2002
ALTR 0.9% 13% 12% 4*
IND 2.0 7** 47 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
ALTR 0% 23% 3 37% A
IND 15 23 NA 20 NA


*the company has paid a dividend for five years
** most companies in ALTR industry don’t pay a dividend

Chart

Note: ALTR stock made great progress off its March 2009 low, quickly surpassing the downtrend off its August 2007 high (red line) and the November 2008 trading high (green line). Long term the stock is in a trading range; the straight blue line is the lower boundary. Intermediate term, it is in an up trend (purple lines); the short term trend is up (brown line). The wiggly blue lines are Bollinger Bands. The Aggressive Growth Portfolio owns a 75% position in ALTR, having Sold shares in early 2011 circa $46 and Bought some of them back in late 2011 at $34. The upper boundary of its Buy Value Range is $17; the lower boundary of its Sell Half Range is $63.




http://finance.yahoo.com/q?s=ALTR



Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.