Microchip Is A Buy On Atmel Transformation
Author:OMO Release Date: 2016年6月24日
Summary
Microchip has a record of making good acquisitions.
Atmel had low margins due to problems Microchip is fixing.
EPS should show strong growth starting in fiscal Q2.
Microchip Technology (NASDAQ:MCHP) is one of the world's sales leaders in microcontroller chips and related semiconductors. Microcontrollers combine a computer with the ability to take input from sensors and then control output devices. They are now in almost every industrial and medical tool, in home appliances and in cars. They are one of the crucial components of IoT (Internet of Things).
Microchip has a history of both growing organically and making smart acquisitions. Most recently it acquired Atmel, which is the focus of this article. Before that it acquired Silicon Storage Technology in 2010, ISSC Technologies in 2014, Supertex in 2014 and Micrel in August 2015.
Microchip semiconductors are in such a variety of final products that to a large extent they are a proxy for the global economy. Sales grow at about the rate of global growth, plus the company's usually increasing market share, plus growth through acquisitions. That does make Microchip subject to global slowdowns, or even to sector inventory corrections. However, the last 5 years show revenue growth but with EPS down lately:
|
Fiscal Year |
Revenue in Millions |
EPS |
|
2012 |
$1,383 |
$1.65 |
|
2013 |
$1,582 |
$0.62 |
|
2014 |
$1,931 |
$1.82 |
|
2015 |
$2,147 |
$1.65 |
|
2016 |
$2,173 |
$1.49 |
Microchip also has a long record of rewarding shareholders with dividends. The current dividend is $0.3595. Lately, the dividend has typically been increased $0.0005 each quarter. MCHP started dividend payments in the third quarter of fiscal year 2003 and has increased its dividend 49 times since then.
Microchip's stock price has been trending up this last year. The 52-week low of $37.77 was hit back in August of 2015. The 52-week high of $53.17 was hit a few days ago on June 8. Microchip is a large-cap stock, with market capitalization currently near $11 billion.
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