Market Overview

This Unique Signal Is Pointing To Upside At Wal-Mart, Analog Devices

This Unique Signal Is Pointing To Upside At Wal-Mart, Analog Devices
Related ADI
Bernstein: Buy Analog Devices Before The Street Catches On
Benzinga's Top Upgrades, Downgrades For February 20, 2018
US Stocks Lower Tuesday (GuruFocus)
Related WMT
5 Biggest Price Target Changes For Wednesday
Fed In Focus: Investors Await Minutes For Possible Deeper Dive Into Inflation
Amazon Not Stopping At $1,500 (Seeking Alpha)
  • Analog Devices, Inc. (NASDAQ: ADI) shares have risen 2 percent in the last 5 trading days, while shares of Wal-Mart Stores, Inc. (NYSE: WMT) have spiked 6 percent over the same period.
  • The RAGE RTI signal indicates that while Analog Devices has room to grow, it is unclear whether Wal-Mart would be able to effectively execute on all its strategies.

Analog Devices: Stock Undervalued

Demand for semiconductors in most of the segments and markets served by Analog Devices is expected to grow over the next year, except for countries like Brazil, the Rage Frameworks report said.

The semiconductor industry is going through consolidation, and the company appears financially strong to make acquisitions. Analog Devices has been actively acquiring, aiming either for efficiency gains or for expanding its technology.

The Trans-Pacific Partnership is expected to boost growth as well as promote innovation in the semiconductor industry, among others. Analog Devices continues to build solid technology capabilities and deliver new products.

The report added that the RAGE RTI signal “has been consistently on the upward trajectory indicating the stock is still undervalued.”

Related Link: These Two Wal-Mart Analysts Are Not Impressed By Q3 Improvements

Wal-Mart: Good Turnaround

E-commerce and mobile-commerce are expected to drive retail growth in the US, China, and other global economies. Ecommerce sales reached a record high in the US in 2Q15, hitting 7.2 percent of total retail sales in the country.

Wal-Mart has made a significant commitment to invest $2 billion in ecommerce over the next couple of years, while focusing on leveraging its physical stores presence.

Wal-Mart has shifted its focus to targeting more affluent customers as well as millennials, by reducing its packages and offering high quality items. The company has more than 600 Neighborhood Markets, which are smaller, closer to city centers, and carry only groceries and consumables.

According to the Rage Frameworks report, Wal-Mart would be offering thousands of price rollbacks on several items, in deals that will last for 90 days.

In the holiday season this year, retail sales are expected to grow 2-4 percent in the US. “So the pie is not growing much, however with the double digit growth in sales via e-commerce channel, can Wal-Mart grab bigger share of the Pie,” the report added.

While there are conflicting opinions on ROI from wage hikes, this may be critical for Wal-Mart to execute its new turnaround strategy. “Wage increase may allow it to retain its best and attract more from the successful competitors.”

Posted-In: Rage FrameworksAnalyst Color Long Ideas Trading Ideas Best of Benzinga


Related Articles (ADI + WMT)

View Comments and Join the Discussion!