A successful portfolio manager understands the importance of adding well-performing stocks to the portfolio at the right time. Indicators of a stock's bullish run include an increase in share price and strong fundamentals.
Texas InstrumentsTXN or TIis one such technology stock which has performed well so far this year and has the potential to carry the momentum in the near term. So, if you haven't taken advantage of the share price appreciation yet, its time you add the stock to your portfolio.
Let's delve deeper into the factors that make this stock an attractive investment option.
What Makes Texas Instruments an Attractive Pick?
Solid Rank & Momentum Score: Texas Instruments currently sports a Zacks Rank #1 (Strong Buy) and a Momentum Score of A. Our research shows that stocks with a Momentum Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best opportunities in the investing space. It indicates the best time for grabbing a stock and taking advantage of its momentum with the highest probability of success. Thus, the company appears to be a compelling investment proposition.
An Outperformer: The stock has returned approximately 12.2% compared with the S&P 500 growth of 11.9%.
Upward Estimate Revision: Estimates for the current as well as 2018 moved north in the last 60 days, reflecting analysts' confidence on Texas Instruments. During this time, the Zacks Consensus Estimate for 2017 increased around 5.4% to $4.13. The Zacks Consensus Estimate for 2018 also inched up 4.9% to $4.30.
Positive Earnings Surprise History: Texas Instruments has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 8.40%.
Healthy Growth Prospects: The Zacks Consensus Estimate for 2017 earnings is currently pegged at $4.13, pointing at an anticipated year-over-year growth of 23.7%. Moreover, earnings are expected grow 4.0% in 2018. The stock has long-term expected earnings per share growth rate of 9.6%.
Other Growth Drivers: Texas Instruments'diverse portfolio, targeting different market segments such as smart grid, factory automation, high-voltage power, LED lighting and control, are positives for its future revenue growth.
Also, the company's margins should continue to expand because of the secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online.
Moreover, the semiconductor giant is poised to gain from the growing IoT market. It has substantial opportunities stemming from the increasing demand for its microcontrollers - low cost, low power, embedded chips that have programming and data memory. Its increasing number of connected devices is expected to drive demand for these chips in 2017 and beyond.
The company's solid market position, increasing focus on new products and increased focus on segments with growth potential remain major growth drivers.
Texas Instruments Incorporated Price and Consensus
Other Stocks to Consider
Other top-ranked stocks in the broader technology space areLam Research Corporation LRCX and Stamps.com Inc. STMP , each sporting a Zacks Rank #1 (Strong Buy), while PetMed Express, Inc. PETS , carrying a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Lam Research delivered a positive earnings surprise of 4.44%, on average, in the trailing four quarters.
Stamps.com Inc. delivered a positive earnings surprise of 30.64%, on average, in the last four quarters.
PetMed Express came up with an average positive earnings surprise of 10.78% in the trailing four quarters.
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