Texas Instruments Well Placed For The Long Haul, But Not Especially Cheap Today

Texas Instruments’ (NASDAQ:TXN) (“TI”) track records of exceptional margins and market share are no accident, and management has not been afraid to break from the pack to chart its own course (including decisions to build inventory when others cut production, using price to gain share, and eschewing distributors for more direct relationships). Over the long term, this has served investors well, with above-sector performance and a reputation as more of a safe haven in the semiconductor space.

I liked Texas Instruments back in October near the end of a slide that took the shares from the $180s to the $150s, and the shares have done reasonably well since then as the broader semiconductor space also has picked up off its lows. I do see elevated ongoing risk to the sector for at least another three to six months, though, and I don’t expect TI to be as much of an outperformer when the markets go back to a “risk-on” positioning with chip stocks.

An OK hold at these levels, I’m more neutral on the stock as a near-term buy, but I would keep an eye out for the upcoming fourth quarter earnings/guidance cycle as a potential opportunity to pick up shares on a pullback.

 

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Texas Instruments Well Placed For The Long Haul, But Not Especially Cheap Today