TSC Ratings' Updates: Allergan

The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the semiconductors and semiconductor equipment industry average. The net income increased by 15.1% when compared with the same quarter one year prior, going from $120.44 million to $138.61 million.

Net operating cash flow has slightly increased to $196.15 million or 2.84% when compared with the same quarter last year. Despite an increase in cash flow, ADI's cash flow growth rate is still lower than the industry average growth rate of 15.23%.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared with other companies in the semiconductors & semiconductor equipment industry and the overall market, ADI's return on equity exceeds that of both the industry average and the S&P 500.

ADI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.88%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.