Altera (FRA:ALR) Forward Rate of Return (Yacktman) % : -6.45% (As of Sep. 2015)

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What is Altera Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Altera's forward rate of return for was -6.45%.

The historical rank and industry rank for Altera's Forward Rate of Return (Yacktman) % or its related term are showing as below:

FRA:ALR' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -6.74 Med: 18.5 Max: 33.4
Current: -6.74

During the past 13 years, Altera's highest Forward Rate of Return was 33.40. The lowest was -6.74. And the median was 18.50.

FRA:ALR's Forward Rate of Return (Yacktman) % is not ranked
in the Semiconductors industry.
Industry Median: 13.06 vs FRA:ALR: -6.74

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

Altera Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Altera's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Altera Forward Rate of Return (Yacktman) % Chart

Altera Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Forward Rate of Return (Yacktman) %

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23.60

32.99

23.99

14.44

3.73

Altera Quarterly Data
	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15
Forward Rate of Return (Yacktman) %	Get a 7-Day Free Trial															7.51	3.73	-0.78	-4.45	-6.45

Competitive Comparison of Altera's Forward Rate of Return (Yacktman) %

For the Semiconductors subindustry, Altera's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Altera's Forward Rate of Return (Yacktman) % Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, Altera's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Altera's Forward Rate of Return (Yacktman) % falls into.

Altera Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Altera's Forward Rate of Return of Sep. 2015 is

Forward Rate of Return	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	1.55638095	/	45	+	-0.0898
	=	-5.52 %

Altera (FRA:ALR) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.

Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.

Altera Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Altera's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.

Altera (FRA:ALR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Altera Corp (FRA:ALR) » Definitions » Forward Rate of Return (Yacktman) %

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Address

Website

http://www.altera.com

Altera Corp was founded in 1983 and reincorporated in the State of Delaware in 1997. It designs and sells programmable logic devices, HardCopy application-specific integrated circuit devices, power system-on-chip devices, pre-defined design building blocks known as intellectual property cores, and associated development tools. Its PLDs, which consist of field-programmable gate arrays, including those referred to as systems-on-chip FPGAs which incorporate hard embedded processor cores, and complex programmable logic devices. FPGAs and CPLDs are standard semiconductor integrated circuits that are manufactured as standard chips that its customers program to perform desired logic and processing functions within their electronic systems. With its HardCopy devices it offers its customers a migration path from a PLD to a low-cost, high-volume, non-programmable implementation of their designs. Its customers can license IP cores for implementation of standard functions in their PLD designs. Customers develop, compile, and verify their PLD designs, and then program their designs into its PLDs using its proprietary development software, which operates on personal computers and engineering workstations. Its products serve a range of customers within the Telecom and Wireless, Industrial Automation, Military and Automotive, Networking, Computer and Storage and Other vertical markets. Its geographical segments include US, Japan, China, Europe and Other. Its customers design electronic systems that typically use three types of digital integrated circuits: Processors, which include microprocessors, microcontrollers, graphics processors, and digital signal processors, control central computing tasks and signal processing; Memory stores programming instructions and data; and Logic manages the interchange and manipulation of digital signals within a system. It classifies its products into three categories: New, Mainstream, and Mature and Other Products. New Products include the Stratix V, Stratix IV, Arria 10, Arria V, Arria II, Cyclone V, Cyclone IV, MAX 10 FPGAs, MAX V CPLDs, HardCopy IV devices and Enpirion PowerSoCs. Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices. Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, Classic, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEXseries, APEX series, Mercury, Excalibur devices, configuration and other devices, intellectual property cores, and software and other tools. The Company competes with PLD vendors such as Lattice Semiconductor Corporation, Microsemi Corporation, and Xilinx Inc. Other semiconductor companies with whom it may compete includes Analog Devices Inc., Atmel Corporation, Avago Technologies, Broadcom Corporation, Cavium, Inc., Freescale Semiconductor Inc., GlobalFoundries Inc., HiSilicon Technologies Company, Intel Corporation ("Intel"), Linear Technology Corporation