The old adage that cash is king is regularly applied to stocks. More than a trite phrase though, a company’s cash pad can often be an indicator of a stocks safety, ability to initiate new growth and pay dividends. This is especially true when investing in a sector where many of the companies are producing duplicate products, for example semiconductors. All semiconductors are not created equal, but many investors, without an advanced technology background may have trouble assessing the value of one product to the market over another. In those instances, it’s always best to look at the balance sheet.
Below are three cash rich companies within the sector that are ranked by their cash equivalents. CE can be employed by analysts to assess the cash support in place at companies battling for the same market share.
It’s not surprise that Intel (INTC), the largest producer of semiconductors internationally has the most impressive CE. Intel, which is rumored to be a possible candidate for Apple’s (AAPL) chip manufacturing business, has a CE of $11.98B;
The CE of Analog Devices (ADI) is dramatically beneath that of industry-giant, Intel but still maintains an impressive CE of $3.43B. The company, which engages in design, manufacturing and marketing of signal processing integrated circuits, has a market cap of $12.5 billion with shares up near 9 percent year to date as of Monday.
Altera (ALTR) ranks third with CE of $3.1B. The company, which manufactures and markets high-performance, high-density programmable logic devices, has a P/E ratio of 18.16.
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