Thursday, April 05, 2012

Xilinx (XLNX) 2012 Review

Xilinx designs, develops and markets complementary metal-oxide-silicon programmable logic devices, including field programmable gate arrays and complex programmable logic devices and markets hardware devices and develops software design tools for programmable electronic technologies.

Steve Cook
The company has grown profits at a 10% pace over the last 10 years and has raised its dividend per share from $.20 in 2004 to $.64 in 2010. Return on equity has come in between 16% and 20% in the last five years. XLNX experienced a hiccup in 2009 due to the recession but recovered in 2010 year and should continue to make progress as a result of:

(1) benefiting from the global trend of programmable logic devices replacing application-specific integrated circuits,

(2) improvement in demand from its two principal markets,

(3) new products expected to open new markets,


(1) potential slowdown in China,

(2) it is in a highly competitive market,

(3) new product ramp up could negatively impact margins.

XLNX is rated A by Value Line, has a 30% debt to equity ratio and its stock yields 2.4%.

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2004
XLNX 2.4% 17% 43% 7*
IND 2.0 7** 47 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
XLNX 30% 18% 1 22% A
IND 15 23 NA 20 NA

* XLNX has only paid a dividend since 2004
** most companies in XLNX industry do not pay a dividend


Note: XLNX stock made great progress off its November 2008 low, quickly surpassing the down trend off its August 2008 high (straight red line) and the November 2008 trading high (green line). Long term the stock is in a trading range; the blue line is the lower boundary. Intermediate term, it is also in a trading range (purple lines). The wiggly red line is the 50 day moving average. The Aggressive Growth Portfolio does not own XLNX. The upper boundary of its Buy Value Range is $15; the lower boundary of its Sell Half Range is $38.

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.