Chipmaker Analog Devices touched a fresh all-time high on July 31 after three straight quarters of strong profit and sales growth. On Tuesday the Relative Strength Rating for Analog Devices stock rose to 71, up from 68 on Monday.
It hit a rough patch last quarter as both sales and profit fell 1% vs. the same quarter a year ago. With artificial intelligence driving a huge surge in the tech sector, will Analog Devices return to its winning ways this quarter? Or will it need more downtime before it starts its next climb?
The upgraded 71 Relative Strength Rating confirms that Analog Devices stock bested 71% of all stocks for price performance over the past 12 months. The best stocks typically have an 80 or higher RS Rating as they begin their biggest climbs. See if Analog Devices can rebound and clear that threshold.
Analog Devices Chips Widely Used
Wilmington, Mass.-based Analog Devices makes and sells a variety of analog and mixed signal (analog+digital) chips. They regulate power, convert and process signals and provide other functions.
Basically they take "real world" things such as temperature, light, sound and motion and convert them into electronic signals. Its chips are used in a wide variety of devices. Its markets include military devices, industrial automation systems, autos, home electronics and a host of other applications.
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Among its other principal ratings, Analog Devices stock has a decent 78 Composite Rating. The Composite is an amalgam of IBD's five other top ratings. Its 86 Earnings Per Share Rating reflects its strong profit growth until last quarter.
One notable bullish indicator is a best-possible A SMR Rating (sales + profit margins + return on equity), on an A-to-E scale. That shows it has excellent fundamentals. One yellow flag is its D+ Accumulation/Distribution Rating. That shows that institutional investors like mutual funds and insurance company funds aren't fully convinced it will right the ship this quarter.
Tuesday afternoon, ADI stock traded around 183, up for the day. And it was on track for its fourth higher close in the last five trading sessions. Last quarter, EPS fell 1% to $2.49 on a 1% dip in revenue to $3.08 billion. The prior three stanzas its EPS rose 58%, 42% and 18%. During that time sales grew 39%, 21% and 10%.
ADI Chips In Nearly Every Type Of Device
Because its chips are ubiquitous, in nearly every type of system, Analog Devices stock is a steady Eddie, growing at a decent clip over the years. It more than doubled from a 79.08 low near the end of March 2020 in the Covid market crash. More recently, it climbed about 37% from a 133.48 low on Oct. 13 at the end of the bear market. Although it's not near an ideal buy point right now, see if it forms and breaks out from a proper chart pattern.
Analog Devices earns the No. 6 rank among its peers in the 32-stock Electronics-Semiconductor Manufacturing industry group. Microchip Technology and Macom Tech Solutions are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, relative price strength is a good gauge to check.
IBD's unique RS Rating identifies technical performance by showing how a stock's price action over the last 52 weeks measures up against that of the other stocks in our database.
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