9 Reasons to Buy Texas Instruments

02/14/2017 9:00 am EST

Focus: TECHNOLOGY

Nicholas Vardy

Editor, Bull Market Alert, The Alpha Investor Letter, and The Global Guru

Our lasted featured recommendation is a tech name with a storied past — Texas Instruments (TXN), notes Nicholas Vardy, editor of Vardy's Alpha Algorithm, a data-driven system.

Headquartered in Dallas, Texas, Texas Instruments is one of the top 10 semiconductor companies worldwide. It is also one of the world's leading designers and suppliers of digital signal processors and analog integrated circuits.

After acquiring National Semiconductor in 2011, the company became the world's largest maker of analog technology components.

Meanwhile, 9 top investment strategies that we monitor are now betting on Texas Instruments:

Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

Momentum Factor

The stock is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

Goldman Sachs’ Active Beta

The stock is selected according to four factors -- value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.

Shareholder Yield

TXN is one of the companies (a) paying cash dividends, (b) engaging in net share repurchases and (c) paying down balance-sheet debt.

Float Shrink

Companies that shrink their float while growing free cash flow and not increasing their leverage.

High-Quality Stock

The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

Capital Strength

The stock is part of a strategy that seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).

Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

In sum, we recommendation purchase of Texas Instruments at market; place your stop at $71.00.

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