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Trader's Diary

Economic calendar

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Definition of terms:
Earnings

Earnings

refer to the profits or net income generated by a company during a specific period.

  • Earnings are a measure of a company's financial performance and are often reported on a quarterly or annual basis.

  • Positive earnings indicate that a company has made a profit, while negative earnings indicate a loss.

  • Earnings can be influenced by various factors, such as revenue, expenses, taxes, and other financial activities.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Actual

Actual refers to the real or current value or result of something. In the context of IPOs, actual can refer to the actual price or number of shares sold in the IPO, as opposed to the estimated price or number of shares.

Estimate

Estimate refers to a prediction or approximation of something, such as the expected price or number of shares in an IPO. Estimates are often made by investment banks and analysts based on market demand and other factors.

Difference

Difference refers to the numerical or percentage variance between two values. In the context of IPOs, difference can refer to the variance between the estimated and actual price or number of shares sold in the IPO.

Percent

Percent refers to a fraction of 100, often used to express a proportion or rate. In the context of IPOs, percent can be used to express the difference between the estimated and actual price or number of shares sold as a percentage of the estimated value.

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IPOs

IPOs (Initial Public Offerings):

An IPO occurs when a private company sells its stock to the public for the first time to raise capital or money.

The money raised from an IPO can be used for various purposes, such as paying down debt, investing in the company's long-term health, research and development, expanding into new product lines, or purchasing fixed assets.

During the IPO process, the equity shares of private investors

convert into publicly owned shares of the new entity, and early investors may sell their stock once the company's shares begin trading.

The chief benefit of an IPO is to help the company raise money and gain access to the capital markets, allowing for expansion and increasing credibility.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Name

The name is the official name of the company whose shares are being offered in the IPO.

Exchange

The exchange is the stock exchange where the company's shares are listed and traded. Examples of stock exchanges include the New York Stock Exchange (NYSE) and the Nasdaq.

Currency

The currency is the type of currency in which the company's shares are priced and traded. This can vary depending on the country and stock exchange where the company is listed.

Start date

The start date is the date on which the company's shares begin trading on the stock exchange after the IPO.

Offer price

The offer price is the price at which the company's shares are initially offered to the public in the IPO. This price is set by the company and its underwriters based on market demand and other factors.

Shares

Shares refer to the units of ownership in the company that are being offered to the public in the IPO. These shares can be bought and sold on the stock exchange after the IPO.

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Splits

Splits (Stock Splits):

A stock split occurs when a company increases the number of its outstanding shares of stock to boost the stock's liquidity.

In a stock split, the number of shares outstanding increases by a specific multiple, but the total dollar value of all shares remains the same.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and increase the liquidity of trading in its shares.

For example, if a company decides to split its stock 2-for-1, the number of shares outstanding would double, while the share price would be halved.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Split date

The split date refers to the date on which the stock split takes effect. It is the date when the new shares resulting from the split are distributed to existing shareholders. Optionable

Optionable refers to whether the stock is eligible to be used as an underlying asset for options contracts. If a stock is optionable, it means that options can be traded on that stock.

Old shares

Old shares refer to the existing shares of a company before a stock split takes place. These are the shares that will be exchanged for the new shares resulting from the split.

New shares

New shares are the additional shares that are issued to existing shareholders as a result of a stock split. The number of new shares is determined by the split ratio, such as 2-for-1 or 3-for-2, where shareholders receive a certain number of new shares for each old share they own.

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Texas Instruments in the Third Quarter of 2024 – Hope for Recovery?

Date: 23.10.2024

As part of this week, I analyzed the third-quarter results of Texas Instruments Inc. (NASDAQ: TXN), which provide an interesting insight into future developments in the semiconductor sector. Even though the company announced the eighth consecutive decline in sales, the tone of the outlook is in an optimistic spirit, which signals the potential for a recovery in demand soon.

Overview of results

Texas Instruments reported revenue of $4.15 billion for the third quarter, down 8.4% year-over-year. However, this decline is slightly better than analysts' estimate of $4.12 billion in revenue. Earnings per share came in at $1.47, while the market had predicted a value of $1.37. These results, while not dazzling, show the company's ability to keep up with market challenges.[1]

However, chip inventories in key segments, especially in the industrial and automotive sectors, continue to hamper overall growth. CEO Haviv Ilan said during a conference call that customers are still working to reduce excess inventory, but the market is slowly stabilizing, according to him. Ilan emphasized that Texas Instruments' three main markets are already showing signs of recovery, but the industrial and automotive segments, which are the largest sources of revenue, have not yet met expectations. The statement "It's about time, but we haven't seen it yet" became the focal point of Ilan's speech, suggesting cautious optimism.

Looking to the future

The company's outlook for the fourth quarter is conservative. Texas Instruments expects revenue in the range of $3.7 billion to $4 billion, which is less than analysts expected ($4.08 billion). Earnings per share are expected to be between $1.07 and $1.29, while analyst estimates predicted $1.35.[2] However, this slightly pessimistic outlook did not discourage investors, who reacted positively to the company's overall tone. Texas Instruments shares rose around 3%[1] in later trading, showing that the market is considering the potential for a longer-term recovery.*

Competition and market environment

Although Texas Instruments has difficulties with excessive inventory in the main segments, it also has its bright sides compared to the competition. Some other chip companies, such as ASML Holding NV, are seeing a decline in orders, while Taiwan Semiconductor Manufacturing Co. (TSMC) has brought a strong outlook. TSMC predicts growth due to demand for advanced chips for artificial intelligence.[3] This confirms that the industry faces an imbalance between traditional and new technologies.

Long-term potential

Texas Instruments' biggest advantage is its ability to supply chips that, while performing simple but critical functions in a variety of devices. The industrial and automotive segments account for more than 70% of the company's revenues, giving TI a strong position in these industries. The demand for these chips is driven by the growing presence of electronics in everyday devices, which adds value to Texas Instruments' products.

An important step of the company is also the construction of new factories and a focus on in-house production. While these investments in production capacity are currently pushing margins, they can bring significant cost benefits in the long term, boosting competitiveness.

Investment considerations

For the investor, Texas Instruments represents a stable company with long-term growth potential. While the near-term outlook suggests some volatility, the firm has strong fundamentals, and its products are essential for a few industrial and automotive applications. In addition, ongoing investment in manufacturing and presence in several key markets increase the likelihood of future growth.[4]

As an investor, I will monitor the development of inventories and demand in the automotive and industrial segments. If the situation in these industries improves, Texas Instruments has the potential to return to growth. However, given its current market position and investment activities, Texas Instruments remains an attractive long-term opportunity, despite the current uncertainty.

* Past performance is not a guarantee of future results.

[1,2,3,4] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which is subject to change. Such statements are not a guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.


[1] Share price performance of Texas Instruments Inc. over the past five years: https://tradingeconomics.com/txn:us

https://finance.yahoo.com/news/texas-instruments-gives-weak-forecast-201923052.html

Date: 19.2.2025
Intel and Speculation About a Possible Company Split

Today, I noticed that Intel's stock has risen by nearly 50% from its February low, clearly indicating that the price is reacting to ongoing speculation about a potential company split.* Intel has been struggling with the loss of its technological edge and market share, with its performance lagging behind competitors like Nvidia, which dominates the AI chip segment. Ongoing negotiations between TSMC, Broadcom, and the Silver Lake investment group suggest that Intel's leadership is actively exploring ways to regain its market position and restore investor confidence.

Date: 12.2.2025
Alibaba and Apple Forge AI Partnership in China

This morning, I noticed a sharp increase in Alibaba shares – almost 8%1 since last week. The stock thus continues the bullish trend that we last saw in September last year.* I immediately started to find out what was behind it, and I came across an interesting piece of news. Apple is reportedly working with Alibaba to develop AI features for iPhones in China. This news immediately caught my attention, so I started looking for ways to benefit from it.

Date: 5.2.2025
AMD Slips After Earnings Report

For us investors following the semiconductor sector, today was very significant. AMD announced its results for the fourth quarter of 2024, beating expectations in terms of both sales and profit. Nevertheless, the shares fell by more than 9% after the end of regular trading hours.* This decline subsequently raised questions that I also dealt with. Is this an overreaction of the market, or is it a legitimate warning sign?

Date: 29.1.2025
ASML Exceeds Expectations: A Buying Opportunity?

Today's trading day was very interesting for me as I focused on the results of ASML, a leading player in chip manufacturing equipment, which published its results for the fourth quarter. ASML reported orders worth €7.09 billion, well above expectations. This order intake is a significant indicator that the demand for advanced equipment, driven by the growth of the AI field, remains strong.

Date: 22.1.2025
A New Dawn for AI Investment in the US

Yesterday, I witnessed a groundbreaking shift in the investment landscape as President Donald Trump unveiled Stargate, up to $500 billion private sector initiative designed to revolutionize artificial intelligence (AI) infrastructure in the United States. This announcement, featuring major players like Oracle, OpenAI, and SoftBank, caught my attention as a significant moment in the AI race, promising opportunities for investors like me.

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