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TheStreet Open House

5 Semiconductor Stocks With Upside

Stocks in this article: TXN AMAT MSCC SWKS SPRD

NEW YORK ( TheStreet) -- The semiconductor equipment and materials industry viewed a number of mergers and acquisitions last year. With competition picking up and margins getting squeezed, many heavyweight companies tried to create cost synergies through mergers and acquisitions. The five stocks from the semiconductor industry completed their acquisitions in the previous year and are likely to do well in 2012.

Based on average estimates of analysts surveyed by Bloomberg, these semiconductor stocks have upsides ranging from 5% to 70%. The buy recommendation and hold guidance for these stocks is 62% and 31%, respectively.

The stocks are listed in ascending order of upside potential.


5. Texas Instruments (TXN - Get Report) engages in the design and manufacture of semiconductors it sells to electronics designers and manufacturers worldwide. In addition, it sells calculators and related products. It has a market cap of more than $35 billion.

Of the 43 analysts covering the stock, 56% recommend a buy and 35% rate a hold. Analysts polled by Bloomberg foresee the stock gaining an average 4.6% to $32.14 in the upcoming 12 months.

For the 2011 third quarter, the company reported revenue of $3.47 billion, net income of $601 million and earnings per share of 51 cents. EPS includes 9 cents in charges associated with the company's acquisition of National Semiconductor. During the quarter, orders were $3.07 billion. The company used $450 million to repurchase 14.1 million shares of its common stock and paid a dividend of $148 million.

For the fourth quarter, company expects its revenue to range from $3.19 billion to $3.33 billion and EPS of 21 cents to 25 cents.

In September, TXN completed the acquisition of National Semiconductor for a total consideration of $6.4 billion in cash, according to Bloomberg. Subsequent to the acquisition, Texas consolidated results into its analog segment under the name Silicon Valley Analog.

At the 2012 Consumer Electronics Show, Texas Instruments hosted an OMAP4470 processor-based tablet running on a pre-release version of Windows 8.

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