Hey, JP. Yep, I'm still here- I noticed that they nixed the old thread. I've been busy lately with all that end-of-semester stuff. Anyway, I stopped writing for a while because there didn't seem to be much interesting conversation out there. After the furious battle over the potential of DSPs died down, it kinda got boring.
Of course I'm still quite enthusiastic about the stock, and I'm not worried about the slight losses of the last few days. I prefer not to worry about what times of year a particular stock does well- perhaps I'm naive, but I put little faith in market timing.
I should remind you that I'm not necessarily sayin' TXN is a good short-term pick. For short term bets, I'd rather go to Vegas- the odds are about the same (think of your broker's commission as the "house edge"), and they give you free drinks...I plan to hold my TXN for at least a few years, and probably much longer. Unless management starts to disappoint me or some other unexpected event changes their outlook, I'll probably hold them forever and add to my position during the inevitable downturns.
I talked to a guy at Motorola a few days ago, and he told me that TI definitely has the upper hand in DSPs. That's real good news. On the other hand, Valueline has downgraded TXN to a 4 (from a 2 a few months ago) for timeliness. Now that's a little bit of a deterrent, 'cause I'm generally a fan of Valueline. But I'm gonna defy the pro's, and hope that my own personal judgement is better than that of some nameless wall street analyst who doesn't know the first thing about TI's new technologies. For instance, neither of the last two Valueline entries on TXN has even mentioned DSP nor DLP. Hmmmm, sounds like they're missin' the best parts of the story. They also don't seem to realize that TXN has partnerships to limit its exposure on DRAMs.
Valueline goes on to say that TXN has arranged a new 10-year royalty arrangement with OKI (but we're still waitin' on Samsung) at slightly lower rates. I'm not sure exactly how much lower those rates are, but Valueline seems comfortable with them. Valueline also says that sales of non-DRAM TXN semi products have been growing nicely, and that the Extensa laptops are lookin' good. I still have no idea why TI is involved in the laptop market, but I'm glad to see that they're doin' well.
In other words, every aspect of the company looks good except for the Samsung thing and the current DRAM situation, and I'm confident that both of these problems are greatly exaggerated by Wall Street.
You know what bothers me about the royalty stuff? I mean, sure, it's a bummer if they can't get quite as much as they'd like out of their old licenses. But you know, it's not like they won't ever come up with anything new. Of course old technologies lose their value over the years- as I recall, several years ago TI was dismissed as 'The world's authority on the old way of making chips.' Well, they didn't dry up and blow away then, and I don't see 'em dryin' up and blowin' away now. By the time the new licenses are worked out and Wall Street has a chance to digest them, TI will be busy licensing its new technologies- at a hefty profit, I'm sure. They pump a large amount of their earnings into R&D as well as fab building- that gives me a warm fuzzy feelin' inside every time I think about it. While the doomsayers are swearin' off semis forever and Micron licks its wounds, TXN is preparing for the next wave of demand. They seem to be one of the only semi makers with the vision to think long-term in a short-term industry.
Brandon |
