Growth funds love semiconductor leadership. When they see the National Semiconductors (NSM) and the Texas Instruments (TXN) or the Advanced Micro Devices (AMD), Microns (MU) and Teradynes (TER), as well as the twins of semi growth, Altera (ALTR) and Xilinx (XLNX), rolling up, they get excited to take a lot of stocks that are affiliated with the group.

Finally, there is Xilinx (XLNX): This semiconductor company is at the heart of the Internet mobile tsunami and, just like the CEO said when he came on "Mad Money" not long ago, the numbers were great. He had come on to explain away the previous quarter's disappointment because of a manufacturing issue that he said would be resolved, and he assured that you would see fantastic earnings. We did. He's money.

Among the names are Xilinx (XLNX), Altera (ALTR), F5 Networks (FFIV) and Ciena (CIEN).

My son works there

I like tech, I like gadgets and and inovations.

stable company, Top 100 rated. Outperforms the markets daily.

San Jose's chip-maker said its board approved an $800 million buyback plan. Specific factors, like the number and price of the repurchases, will depend on market conditions. The company also said it will increase its quarterly cash dividend to 14 cents a share from 12 cents a share.

On Jan. 17th, the logic chip maker who supplies nearly every market announced third quarter 2008 earnings with sales up 7% and operating margins exceeding 24%. The company experienced net revenues of $474.8 million, a 7% jump from the previous quarter and a 5% increase from the same period last year. Net income rocketed 40% to $103.6 million or 35 cents a share, beating analysts’ expectations of 32 cents a share. The company said stronger then expected sales were fueled by strength in defense and consumer applications.

"Xilinx has consistently generated healthy free cash flow and our dividend yield is one of the highest in the semiconductor industry. The increased dividend and share repurchase program demonstrates our commitment to returning value to our stockholders," stated Xilinx’s recently elected CEO, Moshe Gavrielov.

Analyst David Wong from Wachovia Capital Markets slapped the stock with an outperform rating, explaining that Xilinx expects communications revenue to be up on strong demand of networking infrastructure in Japan and China. In addition, consumer revenue in that region is expected to be above normal as we approach the 2008 Olympic Games. The strong quarter, attractive valuation, and the share repurchase plan also add to Xilinx’s bullish story. "As the largest supplier of programmable logic device chips (PDL), Xilinx benefits form high profitability, stable pricing environment, and low capital requirements," said Wong, who expects the stock to be trading between $28 and $32 (now trading at $23).

Xilinx (XLNX) was upgraded to Buy rating from Neutral at UBS. Price target lifts $27 from $24.50 and FY 2008 eps estimates hold at $1.28.

Cohen: The stock is selling for about 20. Like Intel, Xilinx is trading at about a four-year low on a relative and absolute P/E basis. It is trading for about 14 times our '08 estimates of $1.22 a share, and operating margins are about 24%. [Goldman subsequently raised its '08 forecast for Xilinx to $1.28 a share.] The company has a reasonable amount of cash, which it may use for share repurchases.

Deutsche Bank downgraded five specialty semiconductor stocks from Buy to Hold. ZRAN, XLNX, NETL, NVDA and LSI are the stocks affected. Companies are moving into a seasonally weak time of the year, and the slower economy will hamper any near-term sales recovery.