Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 10

My latest ranker for TXN, Texas Instruments, the DSP
(embedded processors and other analog devices and
ASIC's) king. I ranked them late last year and mid
last year as well. Overall, I have liked TI for
focusing on the embedded chips that run all the
handheld and other devices that are becoming 
ubiquitous in our everyday lives. I.e. everyday you
use devices that use TI chips, they're everywhere and
this I know as an engineer at a DSP and ASIC's
company/competitor in the tech sales and applications
area. They're very tough technically and in terms of

Competitors are Analog Devices (ADI) with their ASIC's
and Sharc DSP, Motorola (MOT) home of the top end
Starcore DSP (w/ Lucent), and LSI Logic a major 
ASIC's player and owner of the ZSP DSP core and a 
licensee of the popular Oak (DSP Group) and Carmel
(Infineon) DSP cores as well tho they dont push them.
Infineon (IFX) or ST MicroElectronics (STM), both of 
Europe might be better third competitors but financial
statements are tough to get that follow GAAP and IFX
at least lost money in the most recently found report,
so LSI seemed a stronger competitor.

That said they scored a 44 up from mid last years 42.
So, the directioin is good. Here's the ranker and 
other comments follow it.


Financial AnalysiCompany Being Evaluated                        Competitor #1   Competitor #2  Competitor #3

                 Texas Instruments (TXN)                             MOT             ADI         LSI Logic
                 Current Period Year-ago PeriodYear-over-Year  Current Period  Current Period Current Period
                     4/21/00        4/21/99       Growth           4/1/00          2/1/00         3/31/00
Income Statement . . .
  Sales                   2,653          2,039     30.1%                 8,768            490            615
  Cost of Goods S         1,370          1,127     21.6%                 5,200            225            365
  Net Income                426            233     82.8%                   448             93             86
  Shares Outstand   819,415,000    813,926,025     0.7%

Balance Sheet . . .
  Cash & Equivale         2,430          2,209     10.0%                 3,872            894            868
  Current Assets          5,974          4,968     20.2%                18,659          1,559          1,662
  Short-term Debt           385            260     48.1%                 3,703             99              2
  Current Liabili         2,518          2,043     23.3%                13,390            565            441
  Long-term Debt            991            989     0.2%                  3,086             13            980
                                                                              1              1              1Competitors
Margins & Ratios . . .
  Gross Margins            48.4%          44.7%     3.6                   40.7%          54.1%          40.7%      45.1%
  Net Margins              16.1%          11.4%     4.6                    5.1%          19.0%          14.0%      12.7%
  Cash-to-Debt              1.77           1.77    -0.1%                   0.57           7.97           0.88       0.71
  Net Cash                1054.0          960.0    9.8%                 -2917.0          781.8         -113.8     -749.7
  Fool Flow Ratio           1.66           1.55    7.4%                    1.53           1.43           1.81       1.59

                  Continue Here

Ranking Rule Makers

1) Brand          Points (0-1)                                3) Financial Dire Points (0-3)
Familiarity                    1                              Sales Growth                   3
Openness                       1                              Gross Margins                  3
Optimism                       1                              Net Margins                    3
Legitimacy                     1                              Shares Outstandin              2
Inevitability                  1                              Cash-to-Debt                   1
Solitariness                   1                              Fool Flow Ratio                0
Humor                          1                              Expansion Potenti              3
  Subtotal                     7                                Subtotal                    15

2) Financial Loca Points (0-2)                                4) Monopoly Statu Points (0-4)
Mass Market Habit              2                              Gross Margins                  2
Gross Margins                  1                              Net Margins                    2
Net Margins                    2                              Net Cash                       4
Cash-to-Debt                   2                              Fool Flow Ratio                0
Fool Flow Ratio                0                              Convenience                    4
Your Interest                  2                                Subtotal                    12
  Subtotal                     9
                                                              5) Your  Enjoymen              1

                   Total Score               44 Second Tier

TI have done a lot recently to bring their brand to the
people via TV and other ads that link TI to the
products and goods you use and/or see everyday.

That said they lose (easily) 4 points because their
flow ratio went up! Arrgh. This happened for two main
reasons. First, they upped a debt (ST) that had been
consistently dropping. They did initiate a lot of fab
upgrades so perhaps that's it, but, still disappointing
that with cash rising they still opted for debt and its
drag on profits. Secondly, they let AR increase with
sales (almost). That cant help. They are the dominant
supplier and shouldnt have to wait for anyone except
perhaps RM port member Nokia who uses TI C54x's in 
just about all their handsets (eg).  

They also lose 2 more points because of that increase
in debt. So, they are within reach of 50 and better
net margins, but, they have to be stricter about debt.
And accounts receivable. OTherwise it was a fairly
conservative report.

So I will keep watching and hope this rise in debt and
flowie is like falling off a diet rather than binging
long term.

Comments welcome, cheers,


Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.