Is Microchip Technologies (MCHP) a Smart Long-Term Investment? - InvestingChannel

Is Microchip Technologies (MCHP) a Smart Long-Term Investment?

Madison Funds, managed by Madison Asset Management, LLC, released its “Madison Mid Cap Fund” third quarter 2022 investor letter – a copy of which can be downloaded here. The Madison Mid Cap Fund (Class Y) was down -3.39% in the third quarter, compared to the -3.44% decline in the benchmark Russell Midcap Index. The Fund (-21.13%) remains ahead of the benchmark (-24.27%) for the year-to-date period as well. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.

In its Q3 2022 investor letter, Madison Mid Cap Fund mentioned Microchip Technology Incorporated (NASDAQ:MCHP) and explained its insights for the company. Founded in 1989, Microchip Technology Incorporated (NASDAQ:MCHP) is a Chandler, Arizona-based microcontroller, mixed-signal, analog, and Flash-IP integrated circuits manufacturer with a $33.8 billion market capitalization. Microchip Technology Incorporated (NASDAQ:MCHP) delivered a -28.13% return since the beginning of the year, while its 12-month returns are down by -15.93%. The stock closed at $61.24 per share on October 27, 2022.

Here is what Madison Mid Cap Fund has to say about Microchip Technology Incorporated (NASDAQ:MCHP) in its Q3 2022 investor letter:

“We initiated a new investment in Microchip Technologies. Microchip is a global provider of microcontroller and analog semiconductor chips. These products are near-ubiquitous in our daily lives, whether we know it or not. They serve as the embedded brains of all sorts of electronic devices and end products that are increasingly smart and connected to the internet, such as cars, phones, kitchen appliances, factory equipment, and so on. Importantly, microcontrollers and analog chips represent a small percentage of the end product bill of materials, yet account for a disproportionately large portion of the performance characteristics of that product. Product cycles and customer retention are very long, as once designed into a product, Microchip is rarely replaced. Growth should be well above average for many years given the increasing electronification around us. In addition, management has announced its intention to return a sizeable portion of its cash flow to shareholders through dividends and share buybacks. We like this dual threat of growth together with excess cash flow.”


Our calculations show that Microchip Technology Incorporated (NASDAQ:MCHP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Microchip Technology Incorporated (NASDAQ:MCHP) was in 41 hedge fund portfolios at the end of the second quarter of 2022, compared to 42 funds in the previous quarter. Microchip Technology Incorporated (NASDAQ:MCHP) delivered a -7.12% return in the past 3 months.

In October 2022, we also shared another hedge fund’s views on Microchip Technology Incorporated (NASDAQ:MCHP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.


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Disclosure: None. This article is originally published at Insider Monkey.

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