2. Texas Instruments Inc (NASDAQ:TXN)
Number of Hedge Fund Investors: 49
Jim Cramer in a latest program praised Texas Instruments’ latest earnings.
Cramer said that historically Texas Instruments has been “spiteful” of Wall Street and their conference calls were “very uncomfortable.”
“But that’s gone. The contemptuous attitude is gone.”
Cramer said the upcoming CapEX meeting of Texas Instruments is going to be “very positive.”
UBS recently published a list of high-quality stocks that also pay dividends. Texas Instruments Inc (NASDAQ:TXN) made it to the list. The stock has a 2.61% dividend yield as of July 3.
Texas Instruments Inc’s (NASDAQ:TXN) valuation has been a concern for many amid a lack of strong growth catalysts. The stock’s forward P/E is 37.80, much higher than the industry median of 24. The average analyst price target on the stock is $181, which is lower than its July 3 closing price of $198. According to data from Yahoo Finance, Wall Street expects Texas Instruments Inc’s (NASDAQ:TXN) earnings to fall by 6% over the next five years on a per-annum basis.
Texas Instruments Inc (NASDAQ:TXN) makes most of its revenue from Industrial applications, Automotive and Personal Electronics. During the first quarter earnings call the management said the industrial segment was down “upper-single digits. The automotive market was down mid-single digits. Personal electronics was down mid-teens. Next, communications equipment was down about 25%.”
“First, we saw personal electronics was the first market that went into the correction. It really is — was the first to come out in the last few quarters, I’d describe it as behaving more seasonal. If you go to the other end of the spectrum, we have, had industrial, which has been declining sequentially from some time. And over the last few quarters, we’ve been talking about how there’s some asynchronous behavior inside of the 12, 13 sectors that we have there. That continued inside of the quarter. So we have got some of the later-cycle sectors that are continuing to decline and declining at double-digit rates. But there are some that are beginning to — begin to slow in the declines and even a couple that grew sequentially.”
Madison Investors Fund stated the following regarding Texas Instruments Incorporated (NASDAQ:TXN) in its Q2 2024 investor letter:
“At semiconductor manufacturers Analog Devices and Texas Instruments Incorporated (NASDAQ:TXN), sales and profits continue to decline due to weak demand, as well as customers and distributors reducing inventory after building it up during the supply chain induced shortages a few years back. However, the shares of both companies appreciated nicely during the quarter as the cycle appears to be bottoming, and investors better appreciate the industry’s secular demand characteristics. We believe this sets the conditions for a nice rebound in profits for these companies over the coming years.”
