After a strong employment report on Friday and a great weekend at the Masters, it is time to put our game faces back on and get back to making money.
On Thursday I wrote about
, and I'm sticking with the technology sector with a play on
Texas Instruments created the first computer using integrated circuits and the first handheld calculator. From the first simple circuit, the world market for integrated circuits grew and prospered. Those components now support an industry that topped a trillion and a quarter dollars in 2005 -- that's $1.275 trillion. Today, Texas Instruments is the world leader in digital signal processing and analog technologies, with more than 31,000 employees worldwide.
This is a company with an incredibly strong balance sheet. TI carries no debt and is loaded with cash. And how does $2.16 billion in free cash flow sound?
TI manufactures a whole host of products. We have all seen the commercials about TI's DLP technology and what 2 million mirrors can do for digital imaging and unbelievable HDTV picture quality. Now just imagine what $2 billion in free cash flow can do for us when the stock is undervalued.
Texas Instruments, which closed the shortened holiday week at $30.82, is providing a fertile environment for shareholders. Since September 2004, the board has authorized $15 billion in stock repurchases, including this year's announcement of a $5 billion share buyback. Share buybacks provide an excellent tip to investors that a company that is well managed and providing a favorable investment opportunity. Investors should seek such opportunities, particularly when the company's balance sheet is as attractive as Texas Instruments'.
In addition, the share buyback provides support for the company's stock price, because management takes advantage of dips in the share price to implement the buyback program, providing a ready buyer of shares should the market turn weak. Along with the share buyback, the company also raised its quarterly cash dividend 33%, providing additional shareholder benefit.
This all makes for an excellent investment opportunity. Shares are trading at a relatively cheap P/E ratio of 11, making the current price an excellent entry point. I have a GTC limit order in to buy 10 contracts of the October 25s (TXNJE) at $6.90, or better.
And Now, the Game of Life
The Boys of Summer completed their first week of play in weather that was more suited for skiing, as several games were postponed due to snow. The Twins, used to frigid conditions in Minnesota, are off to a 4-1 start. In an early-season showdown of NL East leaders, the Braves took two out of three from the Mets to lead the division at 5-1.
The big story in baseball, however, remains the phenomenon known as Dice-K. Daisuke Matsuzaka lived up to the hype in his big-league debut on Thursday, striking out 10 Kansas City Royals in seven innings. Matsuzaka gave up only one run in earning his first major league win in a game covered by 150 members of the Japanese media.
The Red Sox may have to build a temporary structure to house the hordes of Japanese media expected for Dice-K's Fenway Park debut this Wednesday. Adding to the Japanese flavor, the opponent will be Seattle, meaning Dice-K's opening pitch in his new home park will be to Ichiro Suzuki, an established Japanese legend.
Moving to a climate more suited for baseball, the Florida Gators, basking in the aftermath of back to back NCAA Basketball championships, received some good news and some bad news. As expected, the four juniors who formed the nucleus of the team -- Taurean Green, Corey Brewer, Al Horford, and Joakim Noah -- announced their intentions to enter the NBA draft in June.
On a better note, Billy Donovan, the young coaching genius who led the Gators to their consecutive titles, spurned a lucrative offer to replace Tubby Smith at Kentucky, and will remain at Florida.
Alas, the "Tiger Slam" will not occur this year. In a "Masters for the Ages," the relatively frigid conditions and changing wind gusts made the fabled Augusta National course treacherous. The greens, hardened due to the cold and lack of moisture, made approach shots border on the impossible.
Many an approach shot landed tantalizingly close to the hole, only to be sucked back off the sloping greens, which must have seemed like polished marble to the players. The conditions improved a bit for the final round, and that allowed for some creative shotmaking that was not possible in the first three rounds.
Despite the extremely difficult conditions, Tiger Woods was playing in the final pairing with Stuart Appleby, after the field collapsed late in Saturday's third round. Appleby held a one stroke lead on Tiger as the final round began, but nearly everyone expected that margin to evaporate quickly under the intense pressure that comes with playing with Tiger on the final day, particularly at a major. Although Appleby shot three over in the final round, he certainly did not wilt.
Tiger, on the other hand, uncharacteristically did not seize the moment and devour it. Nonetheless, he had his moments. He had a majestic second shot to the par-5 13th that appeared to almost stop on the crest of the slope beyond the hole, but gently gathered momentum, creeping to within three feet of the cup.
Of course, Tiger converted the three-footer for an eagle, and everyone knew he was on the prowl. After parring the 14th, Tiger approached the par-5 15th three strokes off the lead, with another eagle on his mind. Unexpectedly, Tiger's second shot found the water hazard, effectively ending his chances for victory.
The winner, Zach Johnson, is an unheralded 31-year-old who had won only one tournament prior to The Masters. His winning score of 1 over par tied a Masters record for the highest winning score. Regardless, Johnson will forever be included in the elite club of members who have the "Green Jacket" hanging in their closets.
The Players Club recognizes the importance of tradition in sport, with The Masters representing the epitome of such. With guaranteed cash flow through our strategic partner, The Players Club endeavors to maintain family traditions that are akin to the Green Jacket.
At the time of publication, Dykstra was long SanDisk.
Nicknamed "Nails" for his tough style of play during his Major League Baseball career, Lenny Dykstra was an integral member of the powerful Mets of the mid-1980s, including the world champion 1986 squad, and the Phillies in the early 1990s.
Today, Dykstra manages his own stock portfolio and serves as president of several of his privately held companies, including car washes; a partnership with Castrol in "Team Dykstra" Quick Lube Centers; a state-of-the-art ConocoPhillips fueling facility; a real estate development company; and a new venture to develop several "I Sold It on eBay" stores throughout high-demographic areas of Southern California.