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Stock Analyst Update

A Great Value in the Chip Sector: National Semiconductor

Quarterly results again show why the firm's shares are worth a look.

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A good value in the chip sector is hard to find these days, but National Semiconductor (NSM) is one stock that fits the bill. With a combination of solid growth, improving margins, and--best of all--a dirt-cheap stock, the firm deserves a good, long look from investors.

The story at National Semi has been steadily improving for several consecutive quarters, and its fiscal first-quarter results announced Thursday were no exception. The firm’s strong performance in the period, ended August 27, is obvious by its earnings of $0.76 per share (before one-time charges), which exceeded analysts' estimates by more than 17%. More importantly, margins continued to improve as gross margins, or the percent of sales a firm has left after the costs of its goods sold, rose to 53% from just 38% in the year-earlier period.

Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.