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Here's How Much You'd Have If You Invested $1000 in Analog Devices a Decade Ago

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Analog Devices (ADI - Free Report) ten years ago? It may not have been easy to hold on to ADI for all that time, but if you did, how much would your investment be worth today?

Analog Devices' Business In-Depth

With that in mind, let's take a look at Analog Devices' main business drivers.

Analog Devices, Inc. is headquartered in Norwood, Massachusetts. The company is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal and digital signal processing (DSP) integrated circuits.

The product line is composed of amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors.

The company also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products; voltage references; interface products such as isolators, translators and transceivers; wireless products and converters; broadband products including amplifiers, CODECs, chipsets, splitters.

Analog Devices has manufacturing facilities in the United States, Ireland, and Southeast Asia. The company also uses outside foundries, mainly Taiwan Semiconductor Manufacturing Company for front-end processing and third-party subcontractors for back-end operations.

Notably, the company generated $7.32 billion revenues in fiscal 2021.

The company generates revenues from four organized end-markets – Industrial, Consumer, Communications and Automotive.

In Industrial market (55% of fiscal 2021 revenues), Analog Devices caters to the needs of industrial and instrumentation, defense/aerospace, energy management and healthcare sectors.

In Communications market (16%), Analog Devices offers products required in internet infrastructures, broadband and wireless applications.

For Automotive market (17%), the company offers products that are utilized in infotainment, electrification, autonomous, ADAS and safety applications.

Further, the company takes care of the requirements in feature-rich, high-performance products such as portable devices and prosumer video/audio equipment in the Consumer market (12%).

The company caters to the growing demand for its products in these afore mentioned markets via its strong sales channels. We note that it has direct sales offices, sales representatives and distributors in more than 50 countries.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Analog Devices ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in May 2012 would be worth $4,485.22, or a gain of 348.52%, as of May 26, 2022, and this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 201.92% and gold's return of 14.31% over the same time frame.

Analysts are forecasting more upside for ADI too.

Analog Devices posted impressive fiscal second quarter results wherein both earnings and revenues grew year over year. Strength across communication, consumer, industrial and automotive end-markets drove the results. Further, solid demand for high-performance analog as well as mixed signal solutions was a tailwind. Growing momentum across the electric vehicle space on the back of robust Battery Management System solutions remains a positive. Further, growing power design wins are other positives. Solid adoption of advanced radio systems in 5G infrastructure remains a tailwind. Furthermore, the company remains optimistic about the growth prospects associated with its Maxim acquisition and 5G. The stock has outperformed its industry on a year-to-date basis. However, weakening momentum across major applications and leveraged balance sheet are woes.

The stock is up 6.99% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 11 higher, for fiscal 2022. The consensus estimate has moved up as well.

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