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Infineon Chip Delays Could Benefit Texas Instruments |
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| May 29, 2008 08:05 PM UTC |
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Tracked Blogger
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5/29 - "Texas Instruments (NYSE: TXN) shares are trading higher after Nokia (NYSE: NOK) reported that its single-chip plan is still on track despite Infineon (NYSE: IFX), a supplier for NOK, announcing yesterday that it is seeing some delays. TXN is supplying NOK with GSM single chips for its mobile handsets and may be called upon to pick up the slack during this delay." "For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $27.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just five months as long as TXN is above $27.50 at October expiration. TXN would have to fall by more than 16% before we would start to lose money." "This trade could be risky if the company's earnings (due out in mid-July) disappoint, but even if that happens, this position could be protected by the support the stock might find around $28, where it found support over the past two months." 
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3 Related Views
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 N/A risk: moderate |
TI Upgraded by Citi on Handset Performance, Valuation
5/19 - Citi's Glen Yeung is upgrading Texas Instruments (TXN) to Buy from Hold, reversing an earlier downgrade. Yeung has also boosted TXN's target price to $39 from $31. FQ208 and FY08 estimates go to $0.46 and $1.99 from $0.45 and $1.56 respectively. Yeung is upbeat about TXN's performance in handsets:
'Our field checks suggest that rolling forecasts from TI's largest handset customer poin...
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N/A risk: moderate |
A Strong Euro and Weak Demand are Holding Back Infineon
5/6 - "Infineon (IFX) reported a weak second quarter of 2008, as the combined pressures of write-down of carrying value of Qimonda's assets, strong Euro and weaker demand continued to hinder revenues and operating margins. We were disappointed by the poor show by the AIM division, which remained flat sequentially as well as year over year...These results, as well as the treatment of Qimonda as ...
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N/A risk: aggressive |
Is a Merger in Store for Infineon?
5/28 - "Infineon's CEO Wolfgang Ziebart recently departed the company. This has given new energy to consolidation speculations. I think it is not without reason.
Ziebart, it is said, was a proponent of small acquisitions and organic growth. His exit seems to have come after internal management disagreements. With Ziebart gone, the doors are now open for larger mergers directed towards consol...
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