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Analog Devices, Inc. Message Board

big_red_sun 12 posts  |  Last Activity: Oct 21, 2014 9:32 AM Member since: Mar 27, 2012
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  • Reply to

    The 10% Cut for Skills Deficit

    by yield_of_my_dreams Sep 18, 2014 11:47 AM
    big_red_sun big_red_sun Sep 22, 2014 3:11 PM Flag

    There is an opinion piece on the Yahoo news feed, source CNBC. It is entitled "Don't be Jerks.".

    Pretty good summary of the situation, so far as the optics. It's a poor way to tell folks to keep re-training. It should be done verbally, at semi-annual review or as part of standard coaching process. Not put in writing that can be posted outside. I don't see the cost being worth the benefit.

    It would be nice to see some more reporting on new Systems (Power 8, Open Power, new M Frame cycle). Instead, we see this. It does seem like IBM is in a bit of a messaging funk. Like him or loath him, Larry Ellison leaves no one in doubt he aims to win. I'd like to see some bare knuckles on winning share, for once, from the e-level folks.

    BRS

    Sentiment: Hold

  • Howdy,

    Press release out that says the BoD authorized 20% shares bought back. It also said management could buy up to 500 M bucks. Any idea what this second part means in reality? Never seen this type of wording.

    Sounds like they are trying to say mgmt thinks the stock is a steal and wants to buy in, not just buying up shares for treasury/options.

    What say all y'all?

    Thanks,

    BRS

    Sentiment: Hold

  • Reply to

    To Topinvestgun

    by variousmarkets Sep 1, 2014 12:58 PM
    big_red_sun big_red_sun Sep 1, 2014 6:27 PM Flag

    Howdy,

    Generally agree with you. Basically IBM is using leverage to drive earnings growth while they work through systems issues. They are being rewarded with a lowered valuation. Buffett, with a multi-year cycle seems to think they still have a moat of some type. We'll see.

    I have one disagreement: IBM is very very much a middleware vendor. It is critical to their strategy to go to Software+Service, as hardware has been declining since 80's. Trying to hold some of their core and find some growth. Core: CICS, Elastic Storage (was GPFS), etc etc. Growth: Analytics, basically. Security too, but not too many folks notice that. They buy small bolt on software companies, leverage sales force, and get payback, in theory. Seems to be working, software wise.

    They are managing the systems business down. Hold mainframe with that lock. Power going to scale out first, then scale up, whilst going Open Power. I think, basically, kill a lot of the profit for Intel if they can. X86, just get out, as ARM starts to move up (we'll see). Only Intel makes real money on the hardware now. Would not want to be HP or Dell.

    I would not be surprised to see IBM rise 50% in a couple years. Would not be surprised if it did not. Ginny better do something. Maybe buy out EMC or CSCO, go with a big bang event? Real unlikely, but who knows.

    BRS

    Sentiment: Hold

  • Reply to

    Could ESV be a takeover target?

    by scjohnson4047 Aug 5, 2014 6:29 PM
    big_red_sun big_red_sun Sep 2, 2014 10:27 AM Flag

    Ha! Thanks, you are right: Watch what people do, not what they say. So, take what I say with a grain of salt, because I ain't doing anything on ESV right now, just lookin'.

    Point 1: I did realize NOV was owned by Berk Hath, but he trimmed COP and one other in the oil sector....I think his timing is generally uncanny. Maybe he thinks oil is headed lower based on supply/demand balance.

    Point 2: he sees value in doing the derivatives. Still value investing to me, not just classic buy and hold. Heck, he uses a lot of the money collected for his insurance companies as investment funds. Pay out little, invest for extra gains. I don't have the background and resource to do the math on that type of stuff. Buy and hold me.

    Point 3: he is pointing out he thinks the rules are wrong, but he is going to play by them or exploit them to max bennies. Maybe the issue is that corporate taxes are too high here, and personal taxes are too low (his point I think, a tough sell to most folks, ha!) - plus spending is too high vs receipts.....

    Anyhow, just stooging around, looking for oil to get irrationally low again, then grab a chunk of something. Drillers have the highest beta, I believe, so I kind of use those as stalking horses....

    Best of luck to you,

    BRS

    Sentiment: Hold

  • Reply to

    To Topinvestgun

    by variousmarkets Sep 1, 2014 12:58 PM
    big_red_sun big_red_sun Sep 1, 2014 8:54 PM Flag

    Now, that is an interesting suggestion. Appreciate it. Don't know what their major holdings are, but at first glance on Yahoo stats, real interesting. Will look at it some more.

    Full disclosure: I was a two time employee of IBM, 2nd generation, so my view of IBM may be a bit colored. I try to stick to what I think I know something about, even if I am kidding myself. I did buy a bunch in 94/95 and sold most off over time, and very happy with the investment. Would have been happier to buy AAPL in 2002 or so, but life is imperfect, as I am. Onward through the fog.

    I don't see IBM as a raging short, but it ain't gonna triple anytime soon, and the dividend is small. It's a pretty boring stock, but at least a lot of their buybacks do reduce share count, vs other high techs. But, the last 2 yrs have been zero return, for sure...

    I guess your point is that BX will use leverage to more productive uses,and still pays you quite a bit to wait. Interesting. Thanks again,

    BRS

    Sentiment: Hold

  • Reply to

    absolutely insane

    by bot_feeder Aug 20, 2014 2:18 PM
    big_red_sun big_red_sun Aug 21, 2014 11:14 AM Flag

    Cool, thanks.

    I will try and dig a bit in the analog (SLAB?), power (many of them), and maybe comms (BRCM, kinda big though) sector looking for semi values/take outs. Look in a few segments to just not get overwhelmed by take out candidates....I will try to post some thing back. Looking for potential take outs is probably a futile effort, but it is interesting. Most of the takeouts are probably pre IPO anyway.

    NVDA. maybe Intel goes after them? AMD might get eaten, but not sure anyone would want to digest that mess. I don't think the APU/CPU biz is very attractive, just my opinion.

    I owned AMAT and TER from about 96 to 98, and they were very good to me. So, been out a long time. TER is a really solid company, they have a really good position in both wafer test and PCBA test. I have been tempted by them lately. KLIC is undervalued, but they are always undervalued it seems like. No respect for the back end players in equipment, but if the semi uptick continues (TSM claims they are booked for 4Q already), they should see the demand.....

    Good luck with it. You are right to not count on buy-outs, but it sure looks like consolidation is in the cards. Wonder if there is a fund that concentrates on that.....unlikely.

    BRS

  • Reply to

    absolutely insane

    by bot_feeder Aug 20, 2014 2:18 PM
    big_red_sun big_red_sun Aug 22, 2014 8:52 PM Flag

    Follow up, IBD had an article that caught my eye. Probably confirmation bias on my part, but it says "analog/power" segment ripe for consolidation. Listed Atmel, Fairchild, and ON Semi as potential targets. Still gotta do some digging....

    BRS

  • Reply to

    9/2/14 Stock Buyback Announcement

    by big_red_sun Sep 2, 2014 4:14 PM
    big_red_sun big_red_sun Sep 2, 2014 4:29 PM Flag

    Talking to myself.

    I think the wording was awkward on the press release, or I just need coffee.

    Apparently shareholders approved up to 20% buyback, whilst BoD approved mgmt to buy 500 M. Which is less than the headroom the shareholders gave....maybe being conservative.

    On top of that Barrons tech trader had a title that said 20 B (think they mean 20%) buy back, which is absurd, must be a typo.

    Anyway, stock up 6.5 % after hours, we'll see if it lasts. Congrats.

    BRS

    Sentiment: Hold

  • Reply to

    absolutely insane

    by bot_feeder Aug 20, 2014 2:18 PM
    big_red_sun big_red_sun Aug 20, 2014 3:30 PM Flag

    I have held this one forever. Glad to see it pop, but the price is pretty steep, so selling what I have.

    I also held LSI, and Avago took them out. So, consolidation is happening.

    What I have left is ADI, but they just took out Hittite, and I think at 15 B +, TI is not likely to bite.

    Any other midrange ones you think are targets? Presume you already own them.

    Good luck,

    BRS

    Sentiment: Sell

  • Reply to

    Could ESV be a takeover target?

    by scjohnson4047 Aug 5, 2014 6:29 PM
    big_red_sun big_red_sun Sep 1, 2014 6:05 PM Flag

    I have lurked for some time, never taken a position. I tag hold instead of no position.

    Buffett seems unlikely, as he is bailing out on oil to a large degree, at least according to last Q holdings.... ESV is highly capital intensive, which I don't think he likes. US Air was an airline he called his biggest mistake, as it was highly capital intensive, and offered a commodity service. Sounds like ESV, even if ESV is better run. These drillers do seem a bit like airlines. Always relatively low valuations, services, need a lot of capital.

    Value Line had them in portfolio 3 and 4, but took them out of 3 a few weeks ago. So, they see less capital appreciation potential, but the dividend is attractive.

    Anyway, I am an engineer by training, so I am not a financial genius. What has given me pause is the negative levered free cash flow. All these drillers seem to eat up cash flow with capital and associated debt. Would this be an issue for ESV if day rates dropped, say, 30%?

    The land drillers boggle my mind. They get premium valuation. Is it because drill/frack is less oil price sensitive than big rigs? I live in Central Texas, and the boom for petro engineers is amazing, salary wise. Usually means things will crater. A cynic. me.

    Been waiting for oil price to drop ever since it dropped a couple years ago to around 80 on WTI. Probably will miss it again. I just don't see take overs in this segment, but that's just me.....cheaper to buy the rigs at distress or bankruptcy rates.

    Good Luck,

    BRS

    Sentiment: Hold

  • big_red_sun by big_red_sun Oct 21, 2014 9:32 AM Flag

    Obviously IBM is facing issues in the systems biz and this is hurting software and services sell through. I have been concerned about that for some time.

    The issue I have is Ginny being this automaton that chants "execution issues" followed by cloud/mobile/security growing wildly. At what point does she get held accountable for "execution issues"? She has leaned on that comment over and over. It has to be miserable for the remaining troops there.

    Looks like a long time in the wilderness. Not sure what to do with few remaining shares. IBM has been good to me the last 20 yrs, but Ginny's Reign of Error has certainly put a dent in the last few years.

    Anyone think the systems biz is recoverable? If not, time to walk away.

    BRS

    Sentiment: Hold

  • Reply to

    ginni 'dear watson' rometty........

    by txtrader77 Sep 2, 2014 9:25 AM
    big_red_sun big_red_sun Sep 2, 2014 9:18 PM Flag

    Last I knew, hardware was less than 15% of revenue, and less than 7% of profits. So, hardware is not a big profit driver, and hopefully the losses have been stemmed by jettisoning X86 and trimming back Power. But, the Z and P (and I to lesser degree) help sell software and service.

    So, the hardware can be managed down, but I am really shocked by how fast P collapsed (AIX). From Enterprise Tech article on 2Q14 server sales:

    X86 machines accounted for a stunning 98.9 percent of shipments and 79.8 percent of revenues in the quarter.

    Ouch.

    I know that the cycles are end of cycle for Z, start of cycle for P/I, but IBM sure has had the systems business fade. They may have better compares, and own most of the 20% of non X86 revenue, and it may well be the most profitable, but dang. Ugly numbers, and I think it will impact software and service to a degree.

    Watson ain't gonna drive enough P sales. Better hope Open Power wins some converts, as IBM goes fabless or fab lite.

    BRS

    Sentiment: Hold

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