Deep Dive: John Rotonti Discusses Texas Instruments Stock
This week we bring back recurring guest John Rotonti to discuss Texas Instruments stock. TI is more than just graphing calculators and is the leading analog chip manufacturer. Here are some questions we asked John on the show:
How’d you come across TI?
Can you give a brief history of the company?
What is Texas Instruments?
What does TI look like today (financially)?
People know TI for dominating analog, less technically intensive, and industrial computer chip markets. Can you explain what that means?
Does TI have any competitors? If so, who are they? How much of a threat do they pose?
On their IR page, they have a quote from Rich Templeton about growth in free cash flow per share. That will get many fundamental investors excited about the stock. What do you think of the capital allocation strategy and management?
Today TI has an EV of $167 billion and generated $6.3 billion in free cash flow last year. What expectations do you think are embedded in the stock right now? Can TI exceed those expectations?
How impacted could they be from a semiconductor downcycle? Do margins contract sharply when demand slows down?
Premortem: What could cause this to be a poor investment?
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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.