Chip maker Analog Devices (NYSE: ADI) announced that it is adding $1 billion to its share buy-back program. That figure would be about 12% of current shares outstanding. The move would obviously improve EPS as the share count drops.

ADI's shares did not move up on the news and still sit at about $36.

Perhaps the reason that the stock did not move is the same reason the shares have been virtually flat for the last five years. The company is really not in a compelling business. In 2006, revenue was $2.6 billion about the same as it was in 2000. Operating profit has actually dropped from $767 million in 2000 to $552 million last year.

Analog Devices operates in a fairly crowded field that includes Broadcom (NASDAQ: BRCM) and Nvidia (NASDAQ: NVDA). Competition can squeeze margins, and chip companies as a group have not done terribly well in the market recently.

Wall Street would think ADI would have something better to do with its money. That might be to buy smaller companies to improve its competitive position or increase R&D spending. But, it appears that would be asking too much.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The New York Times DealBook blog wrote about BusinessWeek writer Arik Hesseldahl's plan for Apple's pile of cash: Apple Inc. (NASDAQ:AAPL) should start a venture capital fund, much like Intel Corp. (NASDAQ:INTC) has done with Intel Capital.

Apple currently has around $12 billion in cash, and adds another billion or so every quarter. Hesseldahl correctly points out that large acquisitions, especially in the tech sector, have a way of not working out as well as planned. Actually, most of them fail miserably.

So the idea of a venture capital fund seems to make sense, particularly because, in addition to the gains that are possible through venture capital, Apple could also fund companies that will increase demand for Apple's products: software companies, companies that make Ipod accessories, and so on.

But here's another idea for Apple's cash hoard. If you own the stock, presumably you believe it's undervalued. So what better investment could Apply make then increasing the company's share buy-back program?