Chipmakers still have room to rise

Article Excerpt

In the past few years, these two computer-chip makers have diversified their product lines, mainly through acquisitions. That move has reduced their dependence on traditional chips, which continue to see stagnant demand. As a result of two big purchases, Intel is now less reliant on consumers and businesses upgrading their personal computers. Texas Instruments also continues to benefit from its decision to quit making chips for cellphones and its September 2011 purchase of analog chip maker National Semiconductor Corp. Both stocks have more than doubled in the past five years. Even so, they still trade at attractive multiples in relation to their earnings. INTEL CORP. $51 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.7 billion; Market cap: $239.7 billion; Price-to-sales ratio: 3.8; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.intel.com) is the world’s leading maker of computer chips: its products power 80% of all personal computers. Demand for Intel’s traditional computer chips has steadily declined in the past few years as more…

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