National Semiconductor Corporation (NYSE: NSM) generating 62.5% gross margins. Who would have thought?

National also announced a recapitalization in which the company will repurchase $2.4 billion in stock. Yesterday's announcement said the semi company will actually borrow money for the repurchase -- a big change for this industry which historically has avoided leverage.

Why the confidence? Brian Halla, National's CEO, said in last night's conference call that the recent semiconductor trough saw National's gross margins bottom at 59%. This is the second trough where National has been able to generate high margins and remain cash flow positive. Halla went as far to say that "smoother sailing is ahead". A bold statement for a highly cyclical industry.

Also, National is forecasting 1% to 4% revenue growth for the upcoming quarter which historically has been a down quarter. Higher-end value products which is leading to higher ASP and volume increases is driving the higher revenue, with billings up 16% and bookings up 33%.

ROIC was above 20% and National expressed confidence it can maintain this return level for both the short and longer term.

National is becoming a must own stock. Jump into this company, this could be the beginning of a big upswing.

As a result of winning the fight to acquire Caremark over rival Express Scripts' offer, CVS/Caremark Corp. (NYSE: CVS) had to sweeten the deal a bit and is now offering more than 1.67 shares of CVS plus $7.50 per share for each share of Caremark.

Beginning today, and valid through midnight, April 24, 2007, CVS is offering shareholders of its common stock $35 cash per share for up to 150 million shares. This amounts to almost 10% of all outstanding shares of CVS/Caremark stock.

The offer may sound tempting, and the stock is down $0.28 in midday trading , at $34.09. But UBS analysts have rated CVS/Caremark a BUY with a target of $42. Likewise, Wachovia analysts rate CVS/Caremark as forecast to Outperform its peers. This may be an occasion when patience will pay off for stock holders. Hold tight. The market may sweeten the deal for you.

The Home Depot Co. (NYSE: HD) is quickly putting to work the $5 billion of cash it raised through a debt offering. Its board has authorized the immediate repurchase of $3 billion of stock through an accelerated share repurchase agreement.

Home Depot has repurchased $6.7 billion of stock, or 173 million shares, this year. Since 2002, it has purchased more than 450 million, or roughly 19%, of outstanding shares.

Taking into account the $5 billion the company recently raised, it will have about $12 billion of debt on its balance sheet. Home Depot is expected to generate about $11 billion in EBITDA, so annual EBITDA covers total balance sheet debt roughly about 1x -- a tremendously conservative capital structure.

Investors need to hear evidence that the worst is over in same-stores sales decline. The most recent figures were simply awful. When better sales figures are announced, Home Depot stock should soar.