National SemiconductorNSM

Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

National Semiconductor is a well-established semiconductor manufacturer that currently focuses on analog chips. The company has seen an overall decline in revenue during the last five years, and business conditions should remain weak in the near term. Read more

Bulls Say

National's focus on power management should serve the firm well, considering the importance of battery life in handsets and personal mobile devices.

Management has shown foresight in redirecting the firm away from lower-margin business and focusing on new and emerging trends

National has been very aggressive in increasing share buybacks and dividend payouts.

National is reaching out to new markets with its power-management device, SolarMagic, which is designed to help solar panels recover lost power. Read more

Bears Say

The firm's power-management segment is facing intense competition from Texas Instruments TXN, a larger competitor with greater sales and engineering resources.

Revenue has declined in each of the last three fiscal years, and National may be unable to reverse this trend in light of macroeconomic concerns.

National may incur significant operational risk by developing and marketing applications, such as SolarMagic, outside of its traditional business model. Read more

Strategy

National's strategic focus in recent years has been on realigning its product portfolio to focus on high-margin business while paring its presence in lower-profitability areas. The company's analog business Read more

Management

Don Macleod took over National's CEO post in November 2009. Macleod joined National in 1978 and has been the firm's president and COO since 2005. Macleod took over the reins from Brian Halla, who retired from the post he has held since 1996. Halla will Read more

Profile

National Semiconductor was founded in 1959 and is based in Santa Clara, Calif. Even though it has produced virtually everything from logic chips to memory, it now focuses Read more

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