Raise Cash By Selling Extended Tech Stocks: Analog Devices

Analog Devices $120.50 SELL this rich company getting worse

Analog Devices, Inc. (NASDAQ: ADI) has been an exceptionally profitable company with persistently high cash return on total capital of 15.0% on average over the past 21 years. Over the long term the shares of Analog Devices have advanced by 44% relative to the broad market index.

Currently, sales growth is -10.1% which is low in the record of the company and lower than last quarter. Sales growth has been 52% correlated with the share price with a five-quarter lead.

The company is recording a high and falling gross profit margin which has been 64% correlated with the direction of the share price. SG&A expenses are low in the record of the company and rising. That implies that the company has limited scope for further cost containment and rising costs are slowing the EBITDA growth rate relative to sales. Lower gross margins and higher SG&A expenses are producing a deceleration in EBITDA relative to sales which has been 85% correlated with the direction of the share price.

More recently, the shares of Analog Devices have remained relatively flat to the February, 2019 high. The current indicated annual dividend produces a yield of 2.2%. Five-year average dividend growth is 6.0%. Current trailing operating cash-flow coverage of the dividend is 2.4 times.

The shares are trading at upper-end of the volatility range in a 16-month falling relative share price trend. The current extended share price provides a good opportunity to sell the shares of this evidently decelerating company.

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