The U.S. Most Profitable Business Is Not Apple's Linear First

Apple is not the most profitable big business in the United States, but Linear Technology Corp (LLTC) is.

According to Bloomberg's rankings, chip maker Linear Technology has the best performance among S&P 500 index stocks. The assessment includes five aspects, including profitability and return on investment.

Linear, which manufactures semiconductors for industrial equipment and luxury automobiles, ranks higher than Microsoft and Apple. Linear's customers include General Electric, BMW, and UBS Orji, an analyst at BS AG, said Linear has become extremely profitable by evading commodity consumer products and focusing on industrial electronics. Ogi said: "It took 5-10 years to design products for industrial users. Not many companies are willing to take this risk, so focused."

Ogi said that the profit margin of chips sold to industrial customers exceeds 75%, while the consumer electronics market is only 50%. Although industrial buyers only account for 10-15% of the entire semiconductor industry, they account for 50% of Linear's sales.

Tore Svanberg, an analyst at Stifel Nicolaus & Co, said: "90% of Linear's products are patented, which means that users can't buy from elsewhere. In the past few years, the company has created the best in the industry. The team of engineers developed better products than their competitors."

Despite this, Linear's profits did not become stock price growth, nor was it strongly recommended by analysts. At present, its market value is $7 billion, which has evaporated 13% this year. Some people think its stock price is undervalued.

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