Out Fox The $treet

Texas Instruments (TXN) stock is up some 4% after hours because of an announcement to increase the existing buyback by $7.5B and increase the dividend by 8%. Another example of why Net Payout Yield stocks provide very compelling investments. A company with an expensive stock or one that has very little cash flow could never provide this much money back to shareholders. Also, its very compelling to own a stock that increases the dividend by 8% a year which alone is much better then Treasury Yields with the 10 year below 3%. Over the last 12 months TXN had a Net Payout Yield of 7.7% with roughly 5.7% coming from buybacks. Lately investors have been lashing back at buybacks, but it is much more efficient then paying taxes on those dividends. Its also worth noting that the Yield exceeds 12% when considering the buyback run rate in Q2. Considering this announcement it wouldn't surprise Stone Fox if TXN isn't keeping up with that pace of $700M in buybacks. Many companies reduced pu...

Texas Instruments (TXN) provided updated guidance for Q3 last Thursday after the market closed and the headlines continue to suggest that TXN guided down or provided less then stellar results. The fact is that TXN guided to the exact midpoints as before - they raised the lower end and lowered the upper end by equal amounts. Why then does the media keep suggesting that TXN along with other semiconducter stocks like Intel (INTC) is forecasting a declining market? My guess is that nobody in the media actually read the TXN release. Here are the details from Q3 2010 Business Outlook : Revenue:  $3.62 – $3.78 billion , compared with the prior range of $3.55 – $3.85 billion EPS:  $0.66 – $0.72 , compared with the prior range of $0.64 – $0.74 . Lets analyze the facts: The revenue mid-point was $3.7B before and now its $3.7B. The EPS mid-point was $0.69 before and $0.69 after. The average analyst estimate is $0.69 and TXN reported $0.62 in Q2. Still looking for any negatives. ...

The Net Payout Yield Portfolio added Texas Instruments (TXN) and WellPoint (WLP) Both stocks have had huge buybacks in recent quarters providing a big boost to earnings going forward. The annualized yields would be easily over 10% so we used the weakness at the opening to add to positions in both stocks. TXN was added around $24.20. Position size now 4.6% WLP was added a round $52.00. Position size now 3.7%.

Texas Instruments (TXN) ups the midpoint of guidance for Q3 to .69 from .64 but the stock sells off 6% after hours based on a basically in line Q2 number. Our expectations would be for the stock to rebound by market opening tomorrow as the Conference Call likely calms the market concerned that revenues were a touch light in Q2. What blows our mind is that TXN reported the highest quarterly operating profit on record, guided up for the next quarter and its not good enough for a market trading at low end valuations. The market appears to expect doom right around every corner yet its not happening. Q3 is going to be very strong for TXN even in the face of a dismal Q2 for the markets. TXN is a 2.4% position in our Net Payout Yield Portfolio so we just love the part about the $750M used for share buybacks in Q2. Thats 2.5% of the outstanding float and 10% on an annual basis on top of a 2% dividend yield. Assuming the price action remains the same into the opening tomorrow, we'll likely ...

Interesting comments after the bell from Texas Instruments (TXN) especially considering the pressure on the Tech stocks today after a downgrade of Intel (INTC). TXN upped the low end of its earnings range. While not a huge surprise to the market it was interesting to see the commentary that demand has not slowed due to the issues in Europe. This outlook from TXN backs our view that the market is at a tipping point of where demand remains strong and will so unless the market falls off the cliff. The market also hit a strong support level at 1,040 and bounce today which provides more support to the theory. Any break of that level likely places the market into the bear camp and leads to the downdraft in consumer demand. Assuming the market bounces from this level, any damage of this correction will be quickly repaired. It's very common to have such a correction lead to at least a retest of recent highs (1,220 level) and usually much higher highs in the near term. Markets have overly r...