Tech and the Semiconductor industry hav been leading the rally since early March. Today’s rally after TI raised estimates could be further sign that the economy is stabilizing. The WSJ reports:
Goldman Sachs: “We believe that TI continues to see the benefits of an industry recovery that is becoming more broad based, with improvements in the industrial end market and broader base of distribution customers adding to the already strong momentum in computing and consumer.”
Deutsche Bank: “While we expect the shares to react positively in the [near term] … we maintain our Hold rating as the combination of macro uncertainty and pending wireless share losses will likely limit upside for the shares on a 12 [month] basis.”
Thomas Weisel Partners: “While Asia continues to be strong, Europe and the U.S. are expected to contribute to sequential growth for the first time in over a year. Lead times have moved out in some areas and overall pricing remains stable. Management believes customers are ramping production, but currently does not see signs of inventory build taking place. In fact, distributor inventory is expected to be flat sequentially suggesting the overall inventory reduction that has occurred since 4Q08 is complete and growth is in line with end demand.”
UBS: “TXN’s comments further reinforce our view of early signs of recovery in the industrial end-markets in US and Europe even as Asia continues to be strong.”
Cowen and Company: “TXN stressed that improved demand trends are simply a more accurate reflection of true end market consumption following a significant inventory correction at the end of the year and some expansion of true consumption, as opposed to ‘inventory re-stocking’ within the channel.”
J.P. Morgan: “TI stated lead times for some products were increasing and the company was ramping production. While good in the short run for TXN, we are concerned about double ordering, which could lead to an inventory correction when lead times decline. We believe lead times should decline during 4Q09.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.