Texas Instruments, Inc. (TXN)
Today, Texas Instruments (TI) has become synonymous with “graphing calculator.” Without our TI’s, most of us would be lost– on the SAT, on the ACT, in our math classes, and so on. But few know that Texas Instruments produces much more than calculators. With unprecedented designs for solar energy, Texas Instruments is a pioneer of the green, renewable energy world. Any pundit on Fox or MSNBC can assert that the technology sector is on the rise, but few have discerned that Texas Instruments is the latent giant amongst the bigger names.
With Apple, Inc., we discussed how a company’s profit-to-earnings (P/E) ratio reflects investors’ hopes for increased earnings and optimism for the company in general. With a P/E ratio of 36.3x, Texas Instruments is right in line with its industry, namely semiconductors– an industry with some of the highest expectations in the technology sector. In fact, analysts predict Texas Instruments’ earnings to be almost 14% higher than its earnings last quarter. And especially with the recent spike in attention on the technology sector, investors will flock to Texas Instruments to reap the benefits of the anticipated gains.
Fortunately, this quality stock can be bought at a bargain price. Texas Instruments’ stock price is nearly 35 percent less than it was since before it began its decline in July 2007. However, TI has begun its ascent once again, almost twice as valuable as it was at its low point of $13.38 per share in December 2008. With its steady climb, Texas Instruments will surpass pre-recession levels in no time, stuffing your bank account with a hefty 46 percent gain within the next year or so.
Furthermore, TI is a large cap company, with a market capitalization of 32.6 billion dollars, more than 3.5 times larger than the majority of its competitors. Texas Instruments’ size gives it an advantage in innovating, expanding, and controlling the market, as it has more resources at its disposal. Large companies like TI also tend to be more stable, so you will be able to sleep well knowing your money isn’t up in the air.
Technology is experiencing a boost it hasn’t seen since before the recession, as investors are eager to capitalize on the ideas forestalled by the difficult economy. Well, now the economy is turning north and swarms of investors are looking for innovative companies at bargain prices; TI demands the spotlight.
-Marc Bernstein
Sources:
Scottrade, Inc. US.
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