Maxim Integrated Products, Inc. (MXIM)

This is part of the mobile internet index that Cramer is touting I looked and figured what the hay its worth a shot to see if they grow they way he thinks they will. His thesis is that the mobile internet while be as big a game changer as the original internet was. Being a CTO I do not think it will be that big a movement but it will provide enough growth for his index to work just not be the huge bust out he thinks it will be. What your looking at is replacing every cell phone and laptop with a device that can connect to the internet at broadband speeds form just about anywhere in the US. The only problem I with his choice is that he left out HP and DELL and Lenovo the big laptop makers they will have a play and I am including them in my version of the index. It's been a flop so far but I have hopes.

Cheap - valuation at/or near net cash. See this article:
http://www.fool.com/investing/general/2008/12/11/a-government-guarantee-that-youll-lose-money.aspx

No debt. Profitable. 7.2% yield. What's not to like, exactly?

Disclosure: I own this stock in real life.

Chosen to be a part of the High Yield Portfolio strategy. Originally created by Fool UK's Stephen Bland (TMFPyad) in November 2000, the High-Yield Portfolio (HYP) strategy invests in a diversified group of 15 blue chip dividend-paying stocks with strong dividend cover, relatively low debt, and a history of increasing dividend payouts. The holding period is theoretically forever -- unless a stock is bought out or cuts its dividend.

Sound crazy? Well, the point of the portfolio is not necessarily for capital gains (although that's certainly a bonus), but to produce increasing amounts of annual dividend income. Daily price fluctuations matter not -- it's the income that matters -- so it removes emotional trading from the picture entirely. Doubters should note that the original UK HYP from November 2000 returned 68% through December 2007 (while the FTSE 100 lost 8%). What's more, the portfolio income payout increased 29% over that seven year period, from 3,451 pounds to 4,462 pounds per year.

7% return just based on dividends. This gives the stock a real reality check value.

Good margin, cheap based on dividend. You're being paid to wait!

Low debt, high yield

$2bn high end analoc IC company struggling a bit with margins and market share since 2003 or so. The stock was hit due to that and stock accounting restatements followed by NASDAQ delisting. Down to $19.8 from high of 55 in 2004 The restatement is almost complete, re focus of the company to improve model and market penetration is in place. It has the broadest set of high end analog digital and mix signal ICs I have seen and higher margins than TI. I think even with the conservative $1.06-1.26 depending on who you ask estmated EPS in 2007 the PE ratio at $19.8 is low.

With the company's legal woes only months away from being resolved, MXIM is ready to bounce back from it's depressed stock price. The next year should be weak as the entire industry expects weak demands, but expect MXIM to be ready when demand starts picking up. It appears that gross margins should maintain as the company has reinitiated it's relationship with distributors, allowing them to sell to both high and low volume customers. The latter seems to be key in shoring sells of high gross margin catalog parts.

Looks like they are making some changes and cutting costs.

Ugly, beaten up stock that has been relentlessly punished and delisted by Wall St. for options back dating issues. Stock is so ugly that very little down side remains, and very little positive news will give it upward movement. Dividend is roughly 4%. Deep value play that should do OK as it crawls out of the accounting pit it has dug for itself.

Severely oversold on future guidance.

Solid balance sheet. Options issues are non-cash related.

undervalued leader in analog tech
uncertainty will disappear after filing of past due financials
will get re-listed

GS just raised to Buy. Goldman's calls on Tech have been fantastic lately, so I'll just leave it at that. You more diligent Cappers can scrutinize the financials (which just happen to be in revision for the last few months/years/whatever) but I'll just draft off GS.
Am I worried about options backdating? No, that is so 2006-ish!
The chart is also a train wreck (according to the Science of Wiggles), which I happen to like!
The only thing I don't like is that this gets a 3 star cap rating. I would much prefer a 1 or 2.

Options backdating problems, and digital circuits are the future. This too shall pass (through). But not any time soon.

stock below fair value of company and market has not realized this yet...

Maxim Integrated Product is a wonderful business run by capable managers. Mr. Market's overblown fears over options back dating, and the resulting delay in release of its financials and possible delisting, have moved the shares of this wide moat business into the bargain bin. I put the intrinsic value of the business at $41/share and am buying at current levels. Today's closing price was $29.39.

M*5