National Semiconductor Not Insulated from Risk
Will it really be able to poke through a new 52-week high?
Here are some of my thoughts ahead of the company's second-quarter numbers, which are due out on December 10.
1. The chip company is coming off a solid quarter. (In fact, to read what I wrote about the company just after the first-quarter release, see Ticker Shock: National Semiconductor Amplifies Good News.) It's thumped expectations in a big way in the last three reported quarters, which really makes me want to pay attention.
2. Right now the Street is looking for $0.14 on revenues of a smidge over $336 million in its second quarter. I feel it will beat that estimate as well. If I'm right and it does come in better than the analysts expect, the shares could have some legs and possibly make a new high.
3. But the value guy in me isn't getting excited. Right now, the estimate for next year is $0.89. For a stock that trades just a bit over $15, that's not crazy cheap.
4. There's a chance the stock can hit a new 52-week high, or come close in the short-term (in and around earnings). And long-term -- meaning three to five years out -- I think it heads higher. That being said, there's a chance the shares could end up pretty much right where they are -- just north of $15 -- a year from today. And because of that, I plan on collecting my share of splinters sitting this one out on the bench.
5. When I hear the word "chip" these days I tend to immediately think of two things (besides the Lay's BBQ brand): Texas Instruments (TXN) and Intel (INTC). I'm hip on both because they have solid upside potential from current levels (see Despite Taking a Beating, Intel Is Still Attractive).
Hey, have a great day!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter