Maxim Integrated Products Inc.
Avalon also initiated a position worth around $12.75 million in Maxim Integrated Products in the fourth quarter. The stake comprised 0.87 percent of the manager’s portfolio. From the end of the year to publication period, the stock price has already gained about 10 percent (that is from about $29 to $32). Maxim, a company that designs and develops integrated circuits, faces significant growth opportunities for its relationship with the leading smartphone maker Samsung. This is in light of the expectations that the global market for smartphones will reach $259 billion in less than 3 years time.
The fundamental numbers show why Avalon favors Maxim. For one, the company has surpassed earnings expectations in all four quarters of 2012 with a surprise rate that ranges from 2 to 22 percent. This partly attributes to the profit margin remaining at a double-digit rate despite a downward trend. The 2.36% quarterly revenue growth (year-on-year) in the fourth quarter is an encouraging recovery from the negative growth in the preceding quarters. Moreover, with its yield of 2.97%, Maxim is a top dividend stock with an impressive record of stable and increasing payments, the latest of which is 7 percent above that of the earlier year. From 2006 to 2012, the annualized dividend grew by an average rate of 12 percent.
Source: Ycharts.com
Source: Nasdaq.com
Goldman Sachs Group, Inc.
The investment manager initiated a significant position of 80,910 shares in Goldman Sachs in the fourth quarter, which is equivalent to 0.71% of its total portfolio. This shows excellent timing because the stock price had gained quite an impressive growth of 25 percent from the end of December to time of publication (that is around $120 to $151). Analysts attribute this surge to its strong financial position and the recent sale of its shares in Industrial & Commercial Bank of China, deemed as a cut to its non-core business.
The company has been performing well in terms of earnings, surpassing expectations in all quarterly reports in 2012, with high surprise rates that range from 10 to 61 percent. Revenues had grown robustly; its quarterly revenue grew by 38.81% year-over-year based on finviz.com compiled data as of Feb. 8. Meanwhile, profit margin remains at a double-digit growth. With a healthy valuation as shown by its P/E ratio of 10.71 and PEG of 1.55, and a dividend record that did not falter even during the financial crisis, this stock is highly favored by those seeking safe dividend income.
Source: Nasdaq.com
I am deeply impressed with the mix of big buys that Avalon Advisors had in the latest quarter. It greatly shows its superior ability in managing its portfolio by choosing not only those that have promising growth potentials and improving margins but those which exhibit excellent dividend growth and safety.
The article Avalon Advisors’ Big Buys in the Fourth Quarter originally appeared on Fool.com and is written by Aubrey Tabuga.
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