Diamond Hill Capital Stock Portfolio: Top 10 Stock Picks

6. Texas Instruments Incorporated (NASDAQ:TXN)

Diamond Hill Capital’s Stake Value: $633.47 million

Number of Hedge Fund Holders: 66

Texas Instruments Incorporated (NASDAQ:TXN) is engaged in designing, manufacturing, and selling semiconductors to electronics designers and manufacturers. Citi Research named the company as its top pick after mentioning that it possesses the best risk-reward ratio compared to other analog semiconductor stocks. Analysts, led by Christopher Danely, are optimistic regarding the broader analog sector as they opine that inventory levels are low, the sales are about to recover, and profit margins and EPS have likely bottomed out. Therefore, they project upside revisions to consensus estimates. Also, analysts are seeing early signs of this recovery. Texas Instruments Incorporated (NASDAQ:TXN)’s exposure to large, fast-growing markets and its robust portfolio of analog and embedded place it well to capture the opportunity ahead.

Texas Instruments Incorporated (NASDAQ:TXN) is ~70% through its 6-year elevated CapEx cycle which, when completed, can uniquely position the company. Furthermore, the company has debuted new power-management chips to support the growing power needs of modern data centers. Diamond Hill Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Other bottom Q4 contributors included Extra Space Storage, Texas Instruments Incorporated (NASDAQ:TXN) and Union Pacific. Semiconductor manufacturer Texas Instruments saw weaker demand in Q4, which pressured shares. However, we expect these demand trends to be transitory and maintain our favorable outlook on the company’s long term prospects and superior competitive position.”