Before the opening bell this morning, Xilinx, Inc. (XLNX - 36.67) announced that it will increase its dividend by 16%, despite slowing sales over the past couple quarters. XLNX raised its quarterly payout to 22 cents from 19 cents per share, which will cost the semiconductor designer about $34.4 million more a year.
XLNX is up more than 1% so far today, adding to its 12.9% year-to-date rise, as Wall Street has reacted positively to the news. At last look, the stock is attempting to find a foothold atop the $35-$36 area, which has emerged as technical support over the past several weeks.
From a sentiment standpoint, it looks as though a number of traders are betting against XLNX's positive price action. Short interest jumped 13.4% during the past month, and now accounts for a healthy 4.8% of the equity's available float. These bearish bets represent four sessions' worth of pent-up buying demand, at the equtiy's average pace of trading, which could translate into a contrarian boon for the stock.
Even the brokerage bunch is skeptically slanted toward XLNX. According to Zacks, more than half of the analysts following the tech issue have pegged it with a lukewarm "hold" suggestion.
A fresh round of upgrades, and/or a capitulation by the short sellers, could provide an additional tailwind for XLNX to prolong its year-to-date ascent.
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