QUOTE AND NEWS
Benzinga  May 14  Comment 
Stephens & Co. initiated coverage on National Instruments Corp (NASDAQ: NATI) with a Overweight rating. The target price for National Instruments is set to $34. National Instruments shares have gained 5.81 percent over the past 52 weeks, while...
Motley Fool  Apr 29  Comment 
The maker of scientific testing tools saw only minimal revenue gains, but profits saw a nice gain.
CNNMoney.com  Apr 23  Comment 
When we think of Fortune 500 CEOs, we imagine the companies' most highly paid employees. But in a few cases, CEOs are actually the worst-paid people on staff.
Market Intelligence Center  Feb 6  Comment 
National Instruments Corp (NATI) presents a trading opportunity that offers a 4.06% return in just 133 days. A covered call on National Instruments at the $30.00 level expiring on Jun. '15 offers an assigned return rate of 4.06% or 11.14%...
Motley Fool  Jan 29  Comment 
The maker of scientific tools for the test and measurement industry got a nice bump in its fourth-quarter results; but will the good times last?




 

National Instruments Corporation (NATI) is a supplier of products that engineers and scientists use in a range of industries. These industries consist of a diverse market for design, control and test applications. The company provides graphical application software and modular hardware to create measurement, automation and embedded systems. Its segment is based on geographic regions, which include the Americas, Europe and Asia Pacific.[1] National Instruments' growth comes primarily from Asia while Europe and America provide a stable source of revenue. The test and measurement industry is mature, with a 90% market penetration of the industry's target audience.[2]

Business Growth

While the most recent recession was one of the most challenging financial periods in history, National Instruments continued to invest in research and development and its field sales force, which has produced a pipeline of innovative products and strengthened relationships with key customers. Due to a commitment to maintaining its growth in its core business, NATI has improved its net margin from 2.5% in 2009 and 10.3% in 2008 to 12.5% in 2010.

Key Trends and Forces

Growth is primarily in Asia

About 30% of NATI's revenues come from Asia.[3] Asia has lower overhead costs, and it is also convenient to be located near major electronics markets such as Japan and China. The large growth potential in China could be a major factor for semiconductor demand in years to come. In comparison to a 22% growth in America and 24% growth in Europe, NATI's Asian business grew at 45%.[3]

Industry Maturation and Macroeconomic Slowdowns

Overall, this diversified business model is expected to net gains, and is expected act as a buffer against economic slowdowns or changes in customer industries. However, the test and measurement industry is relatively mature, with greater than 90% penetration in many of its market segments.[2] Its growth will probably derive mainly from the growth of its end markets, estimated to be 6.5% per year in the long term.[2] While National Instruments' diversified model will help the company weather any moderate economic slowdowns, it, like many other companies in any industry, would feel the effects of a significant economic slowdown.

Competition

National Instruments' competitors are:

Agilent Technologies (A) competes with National Instruments on all of its segments. The others have divisions that compete with National Instruments. Agilent Technologies and National Instruments are the largest companies focused only in the test and measurement industry.

References

  1. Reuters: Company Profile - NATI
  2. 2.0 2.1 2.2 Dr. Rajender Thusu, Team Leader-Sensors Measurement & Instrumentation Practice, Frost & Sullivan -- Test & Measurement World, 8/1/2010
  3. 3.0 3.1 Wikinvest SEC Files: NATI 2010 10-K, Item 8
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