Three Semiconductor Names Give A Negative Signal
Analog Devices (ADI), Linear Technologies (LLTC) and Intersil (ISIL) all gave negative signals after the close on Monday with their 13 day moving averages crossing below their 50 day moving averages. The Semiconductor sector is one of the first to recover in a normal economic rebound, but the fundamentals are still very weak as the companies have little to no pricing power.
Analog Devices (ADI)
Analog Devices rallied today 2.4% with the market moving higher after a six day retreat but the company still faces challenges going forward. Revenue is expected to continue to disappoint with the current quarter showing a 34% decline from the revenue recorded for the same quarter a year ago. Earnings are even worse with 80% of the company's earnings anticipated to be gone compared to the income the company made in the first quarter of 2008. Analysts are now expecting 9 cents of income per share when they were looking for 25 cents a share for the first quarter three months ago.
Linear Technologies (LLTC)
Linear Technologies also rallied near 2.5% today with the market making a nice 3.3% to 3.9% move higher. The outlook for Linear is not as poor as the outlook for Analog Devices but the company is still expected to see a decline in revenue for the first quarter of 32% compared to last year. And the company is expected to see a decline in earnings compare to the previous year's same quarter of 52%. Not the dramatic decline in expectations over the past 90 days but still down from 34 cents a share to 21 cents a share.
The smallest of the three companies, Intersil rallied 4.34% today but has the worst outlook of all three companies. Revenues are declining 46.3%, earnings 92% and the current quarter expectations are down from 21 cents to 3 cents a share. Surprisingly the forward looking price/earnings ratio for all three companies is about the same at a little above 20. Thus making Intersil and Analog Devices very good short candidates if the market doesn't not rally and Linear Tech being a good short candidate.