I bought some today. Came up on the superinvestor top 10 buys and I had a look at the figures and they seemed reasonable. Anyone else? Probably worth nearer 70 dollars per share with growing revenue and profits, demand for chips and runway ahead.
Seems to me a good day for buying some blue chips that are off their highs.
I bought some INTC, ABBV, VZ & BRK.b in our IRA accounts.
VZ and INTC are at or near 52-week lows.
A busy day.
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I bought some today. Came up on the superinvestor top 10 buys and I had a look at the figures and they seemed reasonable. Anyone else? Probably worth nearer 70 dollars per share with growing revenue and profits, demand for chips and runway ahead.
I have had some INTC for years. So far, it is down 6.22% today. It is down 2.36% since I bought it years ago. I used to have more. I did not buy any today or this week or this month.
$70/share? !!! I hope! But it is only $43.92 at the moment.
Coiled spring ready to pop… it was up near 70 not that long ago Apr 2021
Coiled spring ready to pop… it was up near 70 not that long ago Apr 2021
I would caution using a historical price anchor as justification for an investment (I make this mistake often). Better to look at the future and extrapolate. In this case it would seem that a rise to 15x $4 in earnings = $60 would seem very plausible in the next few years.
tecmo
…
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INTC
Revenues in 2012 = $53.3 billion
Revenues in 2016= $62.8 billion
Revenues in 2021 = $79.0 billion
Earnings in 2012 = $11 billion
Earnings in 2017 = $16.8 billion
Earnings in 2021 = $22.3 billion
Share count in 2012 = 4.9 billion
Share count in 2017 = 4.7 billion
Share count in 2021 = 4.1 billion
EPS in 2011 = $2.13
EPS in 2017 = $3.47
EPS in 2021 = $5.47
So in 2011 you could have bought all of INTC for $99 billion @ $20/sh. Since then they have payed out $49 billion in dividends and bought back ~ $25 billion in stock for a total of $74 billion returned to investors. A private investor would have recouped 75% of their invested capital in ten years, pocketing $8-10 mil in fcf for the foreseeable future.
So, we have a company that is returning capital to shareholders while growing both top and bottom line in the face of its ever-imminent collapse. A collapse that has been predicted in each and every of the past ten years, never mind the fact that they have grown revenues and earnings by 48% and 100% respectively over that time period. You can buy these increased revenues and earnings at the same price available to you five years ago, a mere 9 times current earnings.
What am I missing here?
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Just that Mr Market doesn’t like it. You could buy Msoft and Apple for 12 times earnings remember back in the day.
Intel is very hard to call.
Pro: they have a lot of money. A lot. quite profitable. most PCs are still running their chips — AMD chips sometimes have bugs and almost bankrupt not long ago. No PC manufacturer will only rely on one CPU supplier.
Con:
They have a lot of competitors coming at them. Apple, Amazon, NVDA + TSM, all rich companies with a lot of money. Similar to Netflix who has a lot of well funded competitors.
They have huge capx need that may not pay off — chips take years to design and plants takes years to build. Not good in an inflationary environment.
They are very big and slow. Poorly managed and arrogant(at least in the past decade).
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And wasn’t basing 70 off the chart but IV.
What am I missing here?
Try looking through the windshield, instead of the rear view mirror.
The future may not be as bright as the past decade.
Margins set to fall for next 2 years from low 60% to the mid 40%.
Huge capital investments, some of it in low margin foundries, a new line of business for them.
AMD’s products are currently superior and more cost competitive.
Lost Apple as a client. Apple switched to ARM design because Intel’s chips are too power hungry. Apple’s new Macs are getting rave reviews for their processors performance. Intels x86 architecture may be at a dead end.
Fallen two generations behind TSMC in node size. Kept slipping in their own timetable.
Pleading with governments for subsidies for capital investment and protection against superior competitors. Not a good look for a former technology leader: reminds people of US Steel and GM.
Most like the new CEO and feel he is the right choice, but a tough task ahead playing catchup with tremendously skilled Asian competitors.
I own a stake in Intel from 2000 and have been trimming some. I feel there are better options for new investments, viz.
QCOM in semiconductors,
BLK in investment managers,
PFE, CVS and MCK in healthcare,
UPS in package delivery.
All these companies have also fallen a lot like Intel and trade at significant discounts to their usual valuation. And with the exception of PFE, don’t face a decline in earnings.
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You could buy Msft and Apple for 12 times earnings remember back in the day.
Which I did. I watched MSFT trade sideways for almost two years after buying it in 2010, but when the market finally caught up with the underlying numbers … to the moon, Alice!
I don’t think INTC is juiced to explode like MSFT was, but there is certainly more upside than downside at these prices.
Try looking through the windshield, instead of the rear view mirror.
The future may not be as bright as the past decade.
Certainly, I could be wrong about this one, but the same things were said about MSFT in 2010. I have a hard time ignoring a company whose price stagnates or declines while growing revenues and earnings, and paying out cash to shareholders through dividends and share buybacks.
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Try looking through the windshield, instead of the rear view mirror
WOW. That’s antithesis to this board… still Bravo.
Intel has many issues, they are behind the curve in technology, Cloud/ Hyperscalar’s will eventually eat their data center business. AWS, Google, Apple, Azure, FB all either already have their white boxes/ or in the process of having one. TSMC is the gorilla in Foundry business. Clearly Intel has no strength there and it is a desperation move.
Still, at some price what could go wrong?
Certainly, I could be wrong about this one, but the same things were said about MSFT in 2010
MSFT change of fortunes came along with a new CEO, who embraced cloud and pivoted the business. Microsoft board, Bill Gates took a historic decision with that hire.
For Intel, all its engineers are old, many have grand kids. New engineering talent is not going to semi-conductor area in US. Koreans and Taiwan has a huge advantage. Just because MSFT did it doesn’t mean Intel can pull it.
For every MSFT, there are literally 100’s of IBM’s to GE’s.
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Con:
They have a lot of competitors coming at them. Apple, Amazon, NVDA + TSM, all rich companies with a lot of money. Similar to Netflix who has a lot of well funded competitors.
Buffett has said that you should even think about owning a stock for ten minutes that you would not be happy to own for ten years. Similarly, has advocated owning stocks in which you would not be distressed if the market shut down for years.
To me, given the competitive landscape, INTC clearly fails these criteria. (By the way, I think you need to include the likes of MSFT and Alphabet in the ranks of competitors. While everyone just relied on Intel’s chip design in decades past, so many of these companies have achieved sufficient scale to do their own design–and likely have access to a better pool of talented engineers)
I was having a look at FedEx too actually which seemed a lot better value than UPS.
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