Editor's Note: Xilinx is a Trifecta Stocks holding. If you own, or are thinking of owning XLNX, you HAVE to sign up for the FREE webinar hosted by TheStreet's fundamental expert Bryan Ashenberg and technical expert Bob Lang. Sign up now!
One of the factors in the company's success is its manufacture of programmable logic devices (PLDs), which allow customers, not chip makers, to customize functionality. In 2012, Xilinx held 49% of the growing PLD market, compared with 39% market share for its closest competitor Altera (ALTR).
Xilinx reported first-quarter sales for the period ended June 29 increased 9% year-over-year to $579 million. Net income was $157 million or 56 cents a share. Xilinx is due to release second-quarter results after market close on October 16.
"Strong cash flows, continued margin increases and dividend increases should continue to propel the shares higher," wrote Trifecta Stocks' Bryan Ashenberg and Bob Lang in their latest analysis.
Xilinx shares gained 2.4% to close at $46.78, outpacing the S&P 500 which gained 2.18%. Year to date, shares have climbed 30.5%.
TheStreet Ratings team rates Xilinx Inc as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate Xilinx Inc (XLNX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 37.61% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XLNX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income increased by 20.9% when compared to the same quarter one year prior, going from $129.83 million to $157.02 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, Xilinx Inc's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for Xilinx Inc is currently very high, coming in at 71.39%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.12% is above that of the industry average.
- Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that XLNX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.50 is high and demonstrates strong liquidity.
- You can view the full analysis from the report here: XLNX Ratings Report
Remember: Xilinx is a Trifecta Stocks holding. If you own, or are thinking of owning XLNX, you HAVE to sign up for the FREE webinar hosted by TheStreet's fundamental expert Bryan Ashenberg and technical expert Bob Lang. Sign up now!