Texas Instruments, Inc. (NASDAQ:TXN)

TheSmelloscope (56.18) Submitted: 1/22/2011 4:49:23 PM : Start Price: $31.88 TXN Score: -15.57

On 1-6-11 I was sniffing the semi-conductor industry through the Smelloscope.

After several foul run-ins with particularly stinky stocks... I finally came across something that smelt of success. 'Twas Texas Instruments. On that day it was selling for $32.80 and scored 66 points out of 100... making it the 2nd best stock I have ever scored through the Smelloscope.

Here's what made TXN stand out compared to it's stinky peers:

-TXN's P/E is at a 22% discount to it's 5 year average
-Their P/E is at a 50% discount to the industry
-They have more than twice the amount of Total Current Assets as Total Liabilities
-Their current ratio is over 3.5
-They have no long term debt and a better price to sales than many of their peers
-They have a low price to free cash flow compared with many of their peers
-ROE%, ROA%, and net profit margin are all better than the industry average
-Net profit margin is trending up over the last 5 years
-Book value per share has been increasing over the last 5 years
-They offer a modest dividend which has a strong history of growth
-Less than 5% short interest (as a percentage of float)

The bottom line:

Texas Instruments is a well managed company which has fully integrated itself into our everyday lives. They operate in over 30 countries and are heavily relied upon by large equipment manufacturers, design manufacturers, contract manufacturers, and distributors. Most people know them for their calculators... but that's just a small part of what they do. They manufacture products which are in televisions, wireless devices, automobiles, smartphones, computers, and more.

Being that they are so diversified and that they have become a significant international presence, I believe TXN is a great way to invest in industries which might otherwise seem too risky.

My only real concern about Texas Instruments is that there has been some negative insider trading recently. But other than that, everything seems to be pointing in the right direction. Definitely good enough for a Smelloscope thumbs up!

~djshagggyd

Full discloser:

I don't own any TXN in real life

TheSmelloscope is a value rating system created to evaluate stocks for fun. It is operated by a novice investor named djshagggyd. NOVICE being the key word. Do not take Smelloscope advice without conducting your own research.