After hitting a one-year high of $38.99 last July, the stock hit a one-year low of $26.48 on Tuesday. TXN opened this morning at $28.72. So far today the stock has hit a low of $28.03 and a high of $29.18. As of 1:05, TXN is trading at $28.65, up 0.59 (1.6%). The chart for TXN looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just one month as long as TXN is above $25 at August expiration. TI would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.
TXN hasn't been below $26 at all in the past year and has shown support around $27 recently. This trade could be risky if the company's earnings (due out on 7/21) disappoint, but even if that happens, this position could be protected by the support the stock might find just below $27, where it bottomed over the past month.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TXN nor NOK.
I know it doesn't matter at all. Right now we are so stuck on the banking problems and on the companies bleeding from higher energy prices that nobody cares about all of this cash, which will be used to shrink equity. They won't care because the banks, brokers and homebuilders, and the hobbled companies that use oil, have to issue so much equity that you can't see the effect of the equity shrinkage. But it will eventually matter. It has to matter that Deere has taken out 10% of its stock in the last four years. It does matter that Black & Decker (NYSE: BDK) (Cramer's Take) has eliminated almost 20% of its equity. Emerson's taken out 5%, same with Boeing (NYSE: BA) (Cramer's Take). There's just a huge amount of equity being shrunk.
Qualcomm (NASDAQ: QCOM) designs, develops, manufactures and markets digital wireless telecommunications products and services based primarily on its Code Division Multiple Access (CDMA) technology. The firm supplies integrated circuits and system software for voice and data communications, multimedia devices and global positioning products. It also licenses CDMA semiconductor technology and software to more than 100 other equipment and cell phone makers. The Qualcomm Ventures unit invests in wireless communications and Internet startups. Major competitors include Nokia (NYSE: NOK) and Texas Instruments (NYSE: TXN).
The company pleased investors last week, when it guided fiscal Q3 EPS to 54-55 cents (50-52 cents prior, 52 cent consensus) and Q3 revenues to points slightly above $2.7 billion ($2.5-$2.7B prior, $2.61B consensus). Management also guided FY08 EPS to $2.09-$2.13 ($2.04-$2.09 prior, $2.11 consensus). The updated guidance reflected greater than expected demand for Qualcomm's 1xEV-DO and HSPA chipsets, as well as revenues from advanced 3G network upgrades. Jefferies subsequently reiterated its "buy" rating on the shares and boosted its price target to $54.
"Wall Street has recently been very negative about Texas Instruments (NYSE: TXN)," notes wireless sector expert Nikhil Hutheesing. In his Forbes Wireless Stock Watch, the advisor explains, "But things may not be as dire as they sounded last month and I think that with expectations down, the company will end up exceeding expectations in the second half of this year."
"One reason Wall Street has been negiative is that TXN's biggest wireless customer, Nokia, announced a fundamental shift, stating it would no longer depend mostly on Texas Instruments for its chips. Ericsson also said it had shifted to a multi-supplier strategy.
"Besides that, in April, at TXN's earnings conference, CEO Rich Templeton talked of a cloudy economy and said that his company had become become more conservative with its outlook for the second quarter.
"Meanwhile, I've spoken with a number of experts in the wireless area who tell me that orders for TI's chips are significantly higher for the second half of this year than they have been in previous years. These orders are even coming from Nokia. (So far, Nokia's muti-supplier strategy has not had an impact on Texas Instruments.)
National Semiconductor (NYSE: NSM) manufactures a broad range of analog and mixed signal semiconductor devices and subsystems. Products include power management circuits, display drivers, audio and operational amplifiers, interface products and data conversion devices. These are used in communications, networking, automotive, test measurement and aerospace applications. Customers include IBM (NYSE: IBM), Motorola (NYSE: MOT) and Sony (NYSE: SNE). Texas Instruments (NYSE: TXN) is a major competitor.
The firm pleased investors last week, when it reported Q4 EPS of 34 cents and revenues of $462 million. Analysts had been looking for 26 cents and $449.5 million. The gross margin of 65.9% was up sequentially and year over year, driven by cost efficiencies and an improved product mix of higher-value analog devices. Management also guided Q1 revenues to $460-$475 million ($451.22M consensus) and FY09 EPS to about $1.45-$1.51 ($1.24 consensus).
Broadcom (NASDAQ: BRCM) shares are falling after Texas Instruments (NYSE: TXN) warned that weak demand for cell-phone chips could hurt TI's second-quarter earnings. TXN is off by about 2%, but since BRCM specializes in communications chips, it is taking a bigger hit from the bad news. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BRCM.
After hitting a one-year high of $43.07 in October, the stock hit a one-year low of $16.38 in March. This morning, BRCM opened at $27.00. So far today the stock has hit a low of $26.13 and a high of $27.00. As of 1:10, BRCM is trading at $26.69, down $1.01 (-3.7%). The chart for BRCM looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $32.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in six weeks as long as BRCM is below $32.50 at July expiration. Broadcom would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.
After hitting a one-year high of $39.63 in July, the stock hit a one-year low of $27.51 in March. This morning, TXN opened at $30.75. So far today the stock has hit a low of $30.40 and a high of $30.95. As of 12:30, TXN is trading at $30.72, down $0.61 (-2.0%). The chart for TXN looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $37.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four and a half weeks as long as TXN is below $37.50 at May expiration. TI would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.
Stock futures were lower early Tuesday morning after Federal Reserve Chairman Ben Bernanke said in a speech late Monday the Fed will "strongly resist" any surge in inflation expectations, meaning -- no more rate cuts.
On Monday, stocks ended, trying to stage a broad comeback following Friday's selloff. The Dow industrial and the S&P 500 managed to finish the day 70 points (or 0.6%) and 1 point (or 0.1%) higher respectively, but the tech-heavy Nasdaq ended the day down 15 points, or 0.6%, despite Apple delivering the much anticipated 3G iPhone.
No only Bernanke spoke Monday evening, but president Bush commented on the dollar and U.S. Treasury Secretary Henry Paulson said he might consider foreign-exchange intervention yet. These comments strengthened the dollar against major currencies.
On the economic calendar we only have today April U.S. trade balance data to be released at 8:30 a.m. EDT.
Once upon a time, there was a computer brand called Compaq. It was one of the largest sellers of PCs in the entire world in the 1980s and 1990s. Then 2002 comes and Hewlett-Packard Corp. (NYSE: HPQ) merges with the company. The end.
Well, sounds like a short-lived story, and in actuality, it was. Compaq existed for only 20 years (1982 - 2002) before being gobbled up by then-CEO Carly Fiorina of HP to make HP's market share as large as possible. Compaq was mostly thought of as a quality brand from many system administrators I talked to back in the late 1990s, although I heard more horror stories from consumers that owned Compaq PCs. Apparently, the "compatibility" and "quality" that made up the Compaq name wasn't jiving with many consumers who bought its machines.
Compaq, formed on a few dinner napkins in Houston by three former Texas Instruments (NASDAQ: TXN) executives, and became a force to be dealt with in the market for consumer PCs in the 1990s. In fact, it was one of the first manufacturers to dip its toe into making sub-$1,000 PCs, which are now commonplace with every PC manufacturer. The Deskpro, Systempro and Presario were all Compaq brand names, all the way until it merged with HP. HP still markets a few desktop and laptop systems as "Compaq" brands to this day, probably due to just having a few more flavors on the candy shelf for customers to choose over.
But, the name is all that remains from Compaq's 20-year history. Do you miss the company? If you owned one of Compaq's real machines (to this day), sound off below and let us know what you like and don't like about this vanished brand.
Let us know in the comments what you miss about Compaq. And be sure to check out other Companies That Have Vanished.
The Pediatric Ethics Subcommittee of the Pediatric Advisory Committee will meet at 8:30 am to discuss the application of 21 CFR 50.52 (Clinical investigations involving greater than minimal risk but presenting the prospect of direct benefit to individual subjects) to FDA-regulated research. The discussion will be illustrated with hypothetical case examples of research involving HIV vaccines in adolescents and controlled trials of inhaled corticosteroids in children with asthma.
The Pediatric Ethics Subcommittee will meet at 8:00 am to discuss the application of 21 CFR 50.52 to FDA-regulated research illustrated with a hypothetical case example of research using stem cells for treating periventricular white matter injury in children.
Cisco Systems (NASDAQ: CSCO) to hold conference call at 11:00 am to discuss business video innovation.
Texas Instruments (NYSE: TXN) shares are trading higher after Nokia (NYSE: NOK) reported that its single-chip plan is still on track despite Infineon (NYSE: IFX), a supplier for NOK, announcing yesterday that it is seeing some delays. TXN is supplying NOK with GSM single chips for its mobile handsets and may be called upon to pick up the slack during this delay. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TXN.
After hitting a one-year high of $39.63 in July, the stock hit a one-year low of $27.51 in March. TXN opened this morning at $32.36. So far today the stock has hit a low of $32.32 and a high of $33.00. As of 1:17, TXN is trading at $32.73, up 0.24 (0.7%). The chart for TXN looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $27.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just five months as long as TXN is above $27.50 at October expiration. TXN would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.
TXN hasn't been below $27.50 at all in the past year and has shown support around $32 recently. This trade could be risky if the company's earnings (due out in mid-July) disappoint, but even if that happens, this position could be protected by the support the stock might find around $28, where it found support over the past two months.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TXN, NOK, or IFX.
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Monday, July 21
Stock futures were lower early Tuesday morning after Federal Reserve Chairman Ben Bernanke said in a 
This post is part of a series on some of the most memorable .gif){kind=logo}
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