U.S. Markets closed

Texas Instruments Hits 52-Week High

Zacks Equity Research

Shares of Texas Instruments (TXN), or "TI,” hit a new 52-week high of $43.91 on Dec 30, eventually closing at $43.90. The closing share price represents a strong one-year return of 42.1% and a year-to-date return of 35.9%. The average trading volume for the last three months aggregated 5788K shares.

TI delivered positive earnings surprises in the last four quarters with an average beat of 0.47%. This Zacks Rank #3 (Hold) company has a market cap of $48.05 billion with long-term earnings growth expectations of 9.7%.

Growth Drivers

TI’s compelling product line, the increased differentiation in its business, acquisitions, lower-cost 300-mm capacity and better-than-expected third-quarter results were some of the catalysts that drove the stock.

TI reported decent third-quarter 2013 results with the top line surpassing the Zacks Consensus Estimate and increasing both sequentially as well as year over year. Results were aided by an improving mix of business, good cost control and a lower tax rate. Moreover, the company’s bottom-line results were at the higher-end of the guidance range due to stronger demand in the computing, game console and handset markets that had been very weak in the second quarter.

Recently, TI acquired a building in the Chengdu Hi-Tech Zone from UTAC Chengdu Ltd. to open an assembly and test (A/T) operation plant in Chengdu, China. The company has been investing in the Chengdu site since it started its fab in 2010. We believe that TI’s long association with the Chinese government will provide the company with cost benefits and cheap labor, helping the company increase its market share.

Estimate Revision

The Zacks Consensus Estimate for fourth-quarter 2013 remains steady at 46 cents per share. Also, earnings estimates for 2013 and 2014 remained unchanged at $1.93 and $2.16, respectively.

Other Stocks to Consider

Other better-ranked stocks that are performing well at current levels include Intersil Corp. (ISIL), Amtech Systems Inc. (ASYS) and Garmin Ltd. (GRMN). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on GRMN
Read the Full Research Report on TXN
Read the Full Research Report on ASYS
Read the Full Research Report on ISIL

Zacks Investment Research