Question:
I’ve held ADI for a few months now. It’s not a big mover—only by a few dollars. Do you think this will grow long term?
Answer:
Analog Devices, Inc. (NASDAQ: ADI) is a designer, manufacturer and seller of analog, mixed-signal and digital signal processing integrated circuits. While integrated circuits are embedded into many products, Analog Devices primarily focuses on industrial and automotive products. It is not as diversified as other players like Linear Technology Corp. (NASDAQ: LLTC) or Texas Instruments, Inc. (NASDAQ: TXN). The company has about $13 in cash per share and pays shareholders a 3% dividend. The company is expected to grow at an annual rate of about 12% for the next three to five years. The company’s top 20% of customers only make up 34% of the company’s sales, while the company’s largest customer provides only 4% of overall sales. We believe this is a good position for the company. However, the stock can be a bit volatile. The stock has a beta of more than one. If you own Analog Devices, we recommend holding it. As products become more integrated with wireless technology, there should be more demand for integrated circuits.
Question:
I’m curious to know what you think of the multi line insurers like Allstate, Progressive and Travelers?
Answer:
The Allstate Corporation (NYSE: ALL), The Progressive Corp. (NYSE: PGR) and Travelers Companies, Inc. (NYSE: TRV) are in a good cycle. Since 2008, the companies were required to raise capital. With so much capital, pricing power became weak. After Hurricane Sandy, much of the insurers’ capital was used, which gave them the ability to raise prices. We’ve seen this in Travelers’ numbers. Both Allstate and Travelers are more diverse companies. We are OK with investors holding either of these stocks. We see Progressive as more of a one-trick-pony, and prefer to avoid this stock.
At Henssler Financial we believe you should Live Ready. If you have questions regarding the companies you are invested in, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
