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ADI's Fishman pitches analog investors

March 12, 2010 // Bolaji Ojo,

ADI's Fishman pitches analog investors

While skeptics argue that the Analog Devices Inc. president and CEO faces big challenges in talking up his company's value to investors in a tough market, Fishman remains undaunted. Analog Devices, he insisted during an annual Analysts' Day on March 11, offers big opportunities for investors looking to add high-performance, proprietary analog semiconductor technology to their portfolios

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Analog Devices (Norwood, Mass.) deserves a higher valuation on the
equity market, Fishman said, and investors need only to scratch the
surface to unearth value in a business he said has changed dramatically
over the past three years.

"We want to get higher returns for our shareholders," Fishman
said. "In order words, we want to capitalize on our investments because
we are not done yet. ADI has realistic opportunities to grow, we have a
model for growth and we have a credible team that is committed to
executing our vision."

This wouldn't be a hard sell except that Analog Devices plays
in a sector plagued by investor doubts over consistent and sustainable
growth, fluctuating unit demand, extreme pricing volatility created by
the number of companies in the market. Furthermore, analog vendors have
often been viewed by investors as the less attractive, junior players
in an industry characterized by overwhelming investor focus on the
faster growing digital IC segment. That segment is dominated by
companies like Broadcom Corp., a darling of fund investors. Broadcom's
stock price jumped to a new 12-month high this week.

"Our clients often don't see analog stocks as key components of
their holdings," said an analyst attending ADI event. "They cannot as
easily predict the performance and returns of the analog companies
because there is so much variation in sales from one year to another,
and it's difficult making long-term investment planning because of

Adopting a strategy that is unusual among corporate CEOs, the
63-year-old engineer and CEO is directly courting investors. Recent
moves to reduce manufacturing costs along with focusing on
higher-margin product segments have turned Analog Devices around,
placing the company on a growth trajectory that should push it above
market expectations, Fishman said.

He also told analysts and fund managers here that Analog
Devices should not be lumped with others in its market segment since it
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