Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, April 7, 2011

Article Excerpt

PLEASE NOTE: Our next Hotline will go out on Friday, April 15, 2011. TEXAS INSTRUMENTS INC., $35.24, New York symbol TXN, is buying rival chipmaker National Semiconductor Corp. (New York symbol NSM) in a friendly takeover. Texas Instruments is paying $6.5 billion, which is equal to 15% of its $42.1-billion market cap. It held cash of just $3.1 billion at the end of 2010. However, the company is debt free, so it has plenty of room to borrow the money it needs to complete this purchase. Both companies specialize in analog chips, which convert sounds and temperatures into digital signals that computers can understand. Manufacturers install these chips in a wide variety of products, including cars, medical devices and home appliances. Adding National Semiconductor will increase Texas Instruments’ share of the analog chip market, to 17% from 14%. Following the purchase, analog chips will account for about half of Texas Instruments’ revenue. There’s little overlap between the two companies, so any savings from combining…

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