FMA SMIF Presentation

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FMASMIF Presentation

• Analyst Report
• Texas Instruments
• By
• Xiaoshi Liang
• Xiaoshi.liang_at_student.utdallas.edu
• Master Student, UTD
• Feb 29, 2008

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Analyst Profile

• Currently,
• Master (Finance) candidate _at_ UTD
• Background
• BBA in Finance _at_ Assumption University of
  Thailand, Thailand
• Exchange student _at_ University of the Incarnate
  Word, TX, USA

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• Company Profile
• TI is headquartered in Dallas, Texas and founded
  in 1978.
• Big Cap Company in the electronics industry.
• The No. 3 manufacturer of semiconductors
  worldwide after Intel and Samsung.
• The top supplier of chips for cellular handsets.
• The No. 1 producer of digital signal processors
  (DSPs) and analog semiconductors.
• Two reportable operating segments Semiconductor
  (96 of the revenue in 2006), and Education
  Technology.
• As of 2006, the company was listed at number 167
  on the Fortune 500.
• TI is traded on the New York Stock Exchange under
  the symbol TXN.
• Current price is 29.96 (closing price - February
  29, 2008)

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• Geographic Area Information

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• Direct Competitor Comparison As of 2006

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• Financials - historical

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• Financials - historical

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• Financials annual report 2005
• Financials annual report 2006

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• Financials historical
• Change in Depreciation Method on long-lived
  depreciable assets
• Became effective as of January 1, 2006
• 150 Declining-balance method
  straight-line method
• The effect of the change in depreciation method
  for the year ended December 31, 2006
• depreciation expense by 156 million
• both income from continuing operations
  and net income by 77 million(0.05 per share)

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• Financials Highlights

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• Investment merits
• Well known brand name
• ROE 20, ROA 15
• Positive Free Cash Flow (FCF)
• Internationally Diversified

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• Investment Risk
• Financial statements tricks, virtual value of
  stock???
• Big beta (portfolio, short the stock)
• Foreign currency risk
• Strong competitiors

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• Valuation
• Overpriced stock (personal opinion)
• Need to adjust financial statements to find the
  virtual price (subjective procedure)

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• Reference
• Wikipedia - http//en.wikipedia.org/wiki/Texas_Ins
  truments
• Yahoo Finance - http//finance.yahoo.com/q/co?sTX
  N
• Texas Instrument http//www.ti.com