Forget About TI, Look at Intel, Others: Traders
On Monday, pros were talking about the potential upside in chips after Texas Instruments reported higher-than-expected fourth-quarter revenue due to demand for its chips improving more quickly than it had forecast.
But despite the bullish developments, the Fast Money pros do not think the trade is long TXN.
“We’re getting toward valuations where Texas Instruments might not make a lot of sense anymore, says top trader Guy Adami.
Instead he suggests looking at rival Intel .
“The dividend is better and valuation is better,” he says. “And it’s been chugging along nicely.
Joe Terranova echoes the sentiment. I agree with Guy,” he says. But instead of Intel, in the chip space Terranova likes Linear Technologies for upside.
Looking at the numbers more closely, Texas Instruments, maker of chips for a broad array of products ranging from consumer electronics to industrial equipment, reported a profit of $298 million, or 25 cents per share, compared with $942 million, or 78 cents per share, in the year-ago quarter.
The news was particularly welcome considering Texas Instruments had warned on Dec. 8 that chip demand was weak. It forecast fourth-quarter earnings per share in a range of 21 cents and 25 cents on revenue of $3.19 billion to $3.33 billion.
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Trader disclosure: On Jan. 23, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long SU; Terranova is long SJM; Terranova is long BRCM; Terranova is long MUB; Terranova is long EMC; Terranova is long F; Terranova is long SBUX; Terranova is long V; Terranova is long AXP; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long JNPR; Terranova is long CSCO; Terranova is long WFM; Terranova is long XOM; Terranova is long UNG April $5 puts; Adami owns Citigroup (C); Adami owns Goldman Sachs (GS); Adami owns Microsoft (MSFT); Adami owns Agzium (AGU); Adami owns Nucor (NUE); Adami owns Peabody Energy (BTU); A family member of Guy Adami works at Merck (MRK); Seymour is long Apple (AAPL); Seymour is long Cisco (CSCO); Seymour is long Bank of America (BAC); Nations is long Microsoft (MSFT); Nations is long Bank of America (BAC); Nations is long Citigroup (C);
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