Altera (ALTR) 2013 Review

Altera Corp. is a global leader in the design and manufacture of high density programmable logic devices (PLD) and associated computer aided engineering logic development tools.  Its products are utilized in the telecommunications, data communications, computers and industrial applications.  The company has grown profits at a 12% pace over the last 10 years and its dividend at a 24% rate since its initiation in 2007; in addition, it has earned an 18-25% return on equity.  ALTR has experienced  earnings difficulty in recent years but appears to be on the rebound and should continue to grow as a result of:

(1) growing demand for new products,

(2) reversal in recent customer inventory draw downs,

(3) improve operating efficiencies.

Negatives:

(1)    profit margins are narrowing in its older product lines,

(2) global economic uncertainty could weaken demand for ALTR’s products.

Altera is rated A by Value Line, has no debt and its stock yields 1.2%   

  Statistical Summary

                 Stock      Dividend         Payout      # Increases  

                Yield      Growth Rate     Ratio        Since 2007

ALTR         1.2%         10%             15%              5*

Ind Ave       3.3            8**              55                NA 

                Debt/                       EPS Down       Net        Value Line

                Equity         ROE      Since 2003      Margin       Rating

ALTR          0%           20%           4                 36%           A

Ind Ave      11              14             NA              16             NA

*the company has paid a dividend for six years

** most companies in ALTR industry don’t pay a dividend

     Chart

 Note: ALTR stock made good initial progress off its March 2009 low, quickly surpassing the downtrend off its August 2007 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 line).  The wiggly red line is the 50 day moving average.  The Aggressive Growth Portfolio owns a 75% position in ALTR.  The lower boundary of its Buy Value Range is $22; the lower boundary of its Sell Half Range is $63.

         
 

http://finance.yahoo.com/q?s=ALTR

3/13