Stock Pick of the Week: Buy Xilinx (XLNX)

Xilinx is one of July’s Most Attractive Stocks. And like all of our Most Attractive Stocks the company has high and rising economic profits (as distinct from accounting profits**) and a cheap valuation. As shown in our report on XLNX, the company’s ROIC is in the Top Quintile of all the companies we cover. At the same time, the stock boasts an 8% FCF Yield and our dynamic discounted cash flow analysis shows the current stock valuation implies that the market believes XLNX will never grow its profits above current levels.

HIDDEN GEM: Our detailed valuation model shows that XLNX grew its “economic” profits by nearly $14mm during its last fiscal year while it reported an $18mm decline in accounting profits.

As per and , XLNX fits the profile of a great stock to buy.

**See for more detail on why accounting profits are not reliable indicators of corporate profitability or value creation.

Note: Stock pick of the week is updated every Tuesday.

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