Analog Devices (NYSE: ADI) posted better-than-expected fiscal third quarter results Tuesday after the close. Still, shares were down close to 5% in after-hours trading as the chipmaker reported lower than expected margins in the quarter.

The company earned 22 cents per share in the quarter, higher than the 20 cents per share analysts had been expecting. In addition, the company also reported higher revenue numbers than the consensus Street's forecasts.

Best Buy Co Inc (NYSE: BBY), Circuit City Stores Inc (NYSE: CC) and Wendy's International Inc (NYSE: WEN) have all warned of or reported light results during the past few days, a sign that the consumer is slowing down.

• Best Buy reported a drop in gross margins, as promotions for higher-end flat panel TVs kick in. Same store sale comps came in at a positive 3% and the company is guiding to 2% to 2.5% growth.
• Circuit City warned last quarter that business was deteriorating, with its stock getting hit hard.
• Wendy's reported a 3% drop in same store sales and a big miss on its EBITDA line.

Do not expect much of an uptick in consumer spending until the Fed starts dropping rates. Consumer dependency on home equity loans to finance large purchases is over, making year-over-year comparisons hard for the retail industry.

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.