Texas Instruments (TXN)

After basing all summer long, this has broken out technically. They make integrated circuits that go into almost everything. The “internet of things” is where we are going to connect machines and appliances to each other through the Internet for control, measurement, etc. The company designs specific chips that get designed into a product, and then they are there for as long as the product is made. This gives them good, long lasting margins. It has about 15% of its revenue from the auto industry. Dividend yield of 2.69%. (Analysts’ price target is $74.27.)

A great sector to be focused in, and technology is his greatest weighting. Within technology, semiconductors is about the most powerful theme. He really likes this because it is at the heart of the Internet of things. Almost every major device is going to wind up connected to the Internet, i.e., presses in a factory, home appliances, etc. This company designs analog semiconductors, specifically for a task for a purpose. They get designed into a product, and then they stay there as long as the product is manufactured. The use of semiconductors will continue to grow, whether or not the economy is growing. Pays a 2.2% dividend.

He invests in leadership themes, and one of his key themes is “The Internet of Things”. Virtually everything is becoming connected to the Internet, from your refrigerator to your car. This company makes very specific semiconductor chips that are often designed specifically for a customer, has a very long life and have pretty good margins. An example is Autos which is 15% of their sales, but the content over the next few years will likely double.

(Market Call Minute.) The chip companies have run up a little. What worries him is that revenue growth really isn’t rising. They are making more money, but it is through higher margin products, which only goes on for so long.

Manufactures semi-conductors, which gets sold into auto, industrials, personal electronics, communications equipment. Often they are specialized semi-conductors that get designed in and might be there for 5–7 years. They have a dominant position. 60% profit margins. Dividend yield of 2.34%, and have grown this over 20% a year for the last 5 years.

(Top Pick Oct 2/13, Up 21.99%) Bought on a massive breakout and then now he sees it as a 3-5 year trade. The trend is up.

Chart shows some support at around $35. If it came back, it would probably visit the $35. Strong upward trend is showing on the charts from mid-2012.

(A top pick Oct 1/13. Up 1.03%. Up 4.71%.) A 10 year chart would show that this had a very big lid on it of about $40. It broke through that and he can see it doubling in the next 3-5 years. Expect there will be a pull back in the next week or so and you can Buy it safely on a pull back.

Chart shows a big symmetrical triangle up to the beginning of this year, followed by a healthy breakout. Looking at a 10 year chart, it shows that the stock has had a bit of a lid in the mid-$30. It has broken out from this price this year. Could be pretty positive over the next few years.