Analyst Picks & Pans May 7, 2010, 11:55AM EST

Stock Picks: MEMC, Lawson, Radian, Texas Instruments

(page 2 of 2)

Story Tools

Radian Group Inc.: Keefe, Bruyette & Woods equity analyst Nathaniel Otis raised a rating on shares of Radian Group Inc. (RDN) on May 7. He lowered a price target on the stock to $15 from $18.

On May 4 Radian, the second-largest U.S. mortgage insurer, reported a third straight quarterly loss and began a public offering. The first-quarter net loss widened to $310.4 million, or $3.77 a share, from $217.4 million, or $2.69, a year earlier, the company said. It is selling as much as $550 million of shares, and underwriters may also sell an additional $82.5 million, it said.

In a brief note, Otis said the "capital raise [was] accomplished in a tough market." While the company's first-quarter results missed his expectations, Otis said he believes

"the enhanced flexibility from the capital raise, overall improving trends in mortgage insurance, and material pullback in the shares provide an opportunity for significant potential upside in the shares".

Texas Instruments Inc.: Kaufman Bros. equity analyst Suji De Silva maintained a hold rating and $30 price target on shares of Texas Instruments Inc. (TXN) on May 7.

De Silva said in a note that management of the second-largest U.S. chipmaker was "upbeat" about the company's growth potential at a May 6 analyst meeting. "Specifically, TXN targets growing twice as fast as overall semiconductor markets where it competes and reiterated the company's gross and operating margin goals of 55% and 30% respectively," the analyst wrote.

De Silva noted the company's plans to invest "aggressively" in capacity expansion, and said management also stressed steadily improving returns on capital, citing increased efficiency of new product deployments in areas such as high-volume analog, microcontrollers and application processors.

"We believe TXN is well positioned for revenue growth with strong new product/design win momentum" across its microcontrollers and application processors units, the analyst wrote. "However, we expect solid growth from TXN but limited further margin expansion."