About a year ago, NationalSemiconductor (NYSE:NSM) had many hallmarks of a good turnaround: Many folks were thoroughly disgusted with it, the overall industry was still a little spotty, and there were fears that competitors would devour any progress the company managed to make. Result: A year later, the stock is up about 40%.

Although National Semi shares sold off recently, supposedly on chatter about weak order trends in the quarter (and a generally rougher period for tech stocks), the actual numbers seemed pretty good to this Fool. Sales were up 22% for the company's third quarter, while bookings rose 2% sequentially and 40% over last year. More impressively, gross margins improved by eight full points, the company reported 68% higher net income for the quarter, and cash flow continued to trend significantly higher.

How much gas is left in the tank? National Semi's stock has enjoyed a good run, far surpassing other analog companies such as Analog Devices (NYSE:ADI), Linear (NASDAQ:LLTC), or Maxim (NASDAQ:MXIM), and trailing close behind the new darling of the space, Intersil (NASDAQ:ISIL).

On the plus side, healthy sales of mobile phones continue to support their suppliers, and National does a fairly significant amount of business here. On a more skeptical note, though, I'm not sure how much more margin improvement National can really hope for. True, the company has good utilization right now, and it's moving its product mix toward more valuable offerings, but that's what every other company in the industry says it's doing, too.

I'm not trying to shake out any investors who've made a nice gain on this stock already. Just remember one of the old cliches about Wall Street: Bulls and bears make money, but pigs and sheep get slaughtered. Results are improving today, but this is still a cyclical business. I'd at least encourage those who own the stock to protect their gains vigilantly if they want to hold out for even better days.

Semirelated Foolishness:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).