Tuesday, January 27, 2015

Seeking Alpha: Without A Bigger Discount, Maxim Not So Interesting Today

Six months ago, I thought the Street had overreacted to disappointing results at Maxim Integrated Products (NASDAQ:MXIM) to such an extent that the stock looked like a good relative value in the space. Since then, the shares have done pretty well relative to its peer group - up about 15% while Linear (NASDAQ:LLTC) and Analog Devices (NASDAQ:ADI) were up in the single-digits and a stock I liked better, ON Semiconductor (NASDAQ:ONNN) rose about 16%.

Maxim is still facing the same basic set of challenges - finding new sources of growth now that Samsung is no longer likely to be a significant growth driver in the coming years. Maxim is saying and doing some of the right things, including getting out of low-margin businesses like consumer MEMS and touch and focusing on higher-growth opportunities in industrial and auto, but I'm concerned about the company's ability to truly differentiate itself. With the valuation looking pretty fair today, I don't dislike the stock but can't work up a lot of excitement to buy in today.

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Without A Bigger Discount, Maxim Not So Interesting Today

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