Elliott invests in these three companies

Article Excerpt

Activist investor Elliott Management has a long history of improving value at undervalued companies. The firm is now targeting these three companies. We agree with its opinion on Texas Instruments and Johnson Controls but would avoid Southwest Airlines. TEXAS INSTRUMENTS INC. $196 is a buy. The company (Nasdaq symbol TXN; Manufacturing sector; Shares outstanding: 910.5 million; Market cap: $178.5 billion; Dividend yield: 2.7%; Takeover Target Rating: Medium; www.ti.comwww.ti.com) makes analog chips, which convert touch, sound and pressure into electronic signals. Texas Instruments is now building a new facility in Sherman, Texas, to house as many as four new chipmaking plants. In all, the development costs could reach $30 billion. The new plants will use 300-millimetre wafers to make chips, which cost 40% less than the 200-millimetre wafers of its competitors. Activist investor Elliott Investment Management recently announced that it now controls $2.5 billion worth of Texas Instruments’ shares. Elliott wants Texas Instruments to scale back the construction of new plants, as it feels the future demand for…