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Microchip and Analog Devices have been touted by analysts as safer picks
Dreamstime
Two chip stocks that have been touted by analysts as safer picks amid the market’s general turmoil, and slowing demand for semiconductors, just saw significant buying by insiders.
Morgan Stanley analyst Joseph Moore wrote in a report this month that
Microchip
Technology (ticker: MCHP) was one of his two top Overweight-rated ideas among broad-based chip suppliers. Microchip has “one of the best operating models and broadest portfolios in semis,” he wrote. Moore has an $81 price target on Microchip stock.
Citi Research analyst Christopher Danely says a big downturn is coming for the chip industry, but that
Analog Devices
(ADI) should fare better than its peers. “Given our more-defensive nature, we are moving Analog Devices to our top pick,” he wrote, reaffirming a Buy rating on the stock and a target of $192 for the price.
Microchip stock has tumbled 30% so far this year, while Analog Devices stock has slumped 15%. For comparison, the
S&P 500 index
has dropped 18%.
Microchip President and CEO Ganesh Moorthy paid $458,300 on June 16 for 8,000 shares, an average price of $57.29 each, according to a form he filed with the Securities and Exchange Commission. He made the purchase through a trust that now owns 720,313 MIcrochip shares. It was Moorty’s first open-market purchase of stock since he was named to his current position in March 2021. His most recent previous purchase was in August 2018, when he paid $1 million for 12,000 shares, for an average price of $84.10 each. He was Microchip’s chief operating officer at the time.
Analog Devices director Bruce Evans paid $526,200 on June 17 for 3,650 shares, for an average price of $144.16 each. He made the purchase through investment fund Evans Capital, which Evans founded and serves as president. Evans Capital now owns 104,000 Analog Devices shares, and Evans owns another 1,435 shares in a personal account. Prior to this transaction, Evans’ most recent previous open-market purchase of Analog Devices stock was in October 2021, when he paid $1.3 million for 8,001 shares, an average price of $164.98.
Microchip didn’t make Moorthy available for comment. Evans Capital didn’t respond to a request for comment.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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