Texas Texas Instruments Instruments

(TXN)(TXN)Nipun SinghNipun Singh

Yash ManiarYash Maniar

Recommendation Recommendation

Buy: Limit at $25.75Buy: Limit at $25.75

Sell: Stop at $27.50Sell: Stop at $27.50

BackgroundBackground

Founded in 1930; named Texas Founded in 1930; named Texas Instruments in 1951Instruments in 1951

Based in Dallas, TexasBased in Dallas, Texas Total Revenue Last YearTotal Revenue Last Year: 12.50B: 12.50B Gross Profit Last YearGross Profit Last Year: 6.24B: 6.24B Net IncomeNet Income: 1.92 B: 1.92 B

What They MakeWhat They Make Most of its sales comes from the Most of its sales comes from the

semiconductor business, not scientific semiconductor business, not scientific calculatorscalculators

Biggest applications of chips:Biggest applications of chips: DVRDVR X-RaysX-Rays GPSGPS Digital Sound Processing in hearing aidsDigital Sound Processing in hearing aids DLP TVs DLP TVs Blu-RayBlu-Ray Mp3Mp3 Finger-Print BiometricsFinger-Print Biometrics UltrasoundsUltrasounds

Current StatisticsCurrent Statistics

Current Price: Current Price: $24.18$24.18

Range 24.01 - 24.88Range 24.01 - 24.88 52 week 13.70 - 52 week 13.70 -

27.0027.00 Open 24.55Open 24.55 Vol/Avg. 18.41M/Vol/Avg. 18.41M/

12.45M12.45M Mkt cap 30.29BMkt cap 30.29B

P/E 33.64P/E 33.64 Div/Div/

yield 0.12/1.99yield 0.12/1.99 EPS 0.72EPS 0.72 Shares 1.25BShares 1.25B Beta 1.13Beta 1.13 Inst. own 78%Inst. own 78%

Earnings ReportEarnings Report Coming out with earnings report Coming out with earnings report

Jan. 25, 2010Jan. 25, 2010 Expected EPS from Analysts v. Expected EPS from Analysts v.

Actual Per Year: Actual Per Year:

Earnings ReportEarnings Report

History of Expected EPS vs. Actual History of Expected EPS vs. Actual per Quarterper Quarter

Expected Earnings This Expected Earnings This YearYear

As seen in previous slide, TXN As seen in previous slide, TXN continually surpasses expectations continually surpasses expectations for earningsfor earnings

Estimated Earnings this year after Estimated Earnings this year after Earnings Report comes out: $0.493Earnings Report comes out: $0.493

CompetitorsCompetitors STMicroelectronicsSTMicroelectronics MotorolaMotorola IntelIntel

TXN vs. Intel, STM, and Motorola

CompetitorsCompetitors Analog Devices, IncAnalog Devices, Inc FairchildFairchild BroadcamBroadcam National Semiconductor CorporationNational Semiconductor Corporation

TXN vs. ADI, Fairchild, Broadcam, and NSM

Why Buy?Why Buy? Why should we buy?Why should we buy? Intel Corporation had an amazing Intel Corporation had an amazing

earning report recently and according to earning report recently and according to analysts, this news is good for Intel’s analysts, this news is good for Intel’s peers and competitors, because they are peers and competitors, because they are in the same sectorin the same sector

Why not buy its competitors? Texas Why not buy its competitors? Texas Instruments’ earnings report is coming Instruments’ earnings report is coming up soon, and market may cool down by up soon, and market may cool down by the time of the other company's earnings the time of the other company's earnings reportsreports

Why Buy Over Why Buy Over Competitors?Competitors?

Analog Devices, Inc:Analog Devices, Inc: Jim Cramer on Jim Cramer on his show, Mad Money, explicitly his show, Mad Money, explicitly stated that this stock was too stated that this stock was too “hubble” and too risky“hubble” and too risky

Intel:Intel: Already soaring due to Already soaring due to earnings report, prices already too earnings report, prices already too inflatedinflated

NSM:NSM: Texas Instruments is already Texas Instruments is already doing better than NSM and prices are doing better than NSM and prices are sure to increase after its earnings sure to increase after its earnings report comes outreport comes out

SourcesSources

http://www.reuters.com/article/http://www.reuters.com/article/idUSTRE60D5XJ20100116?idUSTRE60D5XJ20100116?type=globalMarketsNewsItype=globalMarketsNewsI

http://www.google.com/finance?http://www.google.com/finance?q=txnq=txn

http://finance.aol.com/quotes/texas-http://finance.aol.com/quotes/texas-instruments-incorporated/txn/nysinstruments-incorporated/txn/nys

The EndThe End