Off Topic,
Barry,
I can hardly recognize my point after your analysis of it. Let me take 1 more stab at it and then I give up.
KO, WD40, Wrigley, and others have products that will produce predictable amounts of revenues forever, and these products can be sold for many times their unit production cost.
INTC has to reinvent itself or its products through planned obsolesence. They have to use cash from profits to do this. There is a steady increase in the amount of capital required to produce the same amount of revenues, but unit growth and production efficiencies via improved tools overcomes this.
To stay profitable in INTC's business is much more difficult, therefore the pe problem.Other "manufacturers" have pe's below their growth rates.
Despite this, INTC's roe is wonderful, so its shareholders think the pe problem should go away.
I am aware that my $5 e example would be after depreciation.Depreciation is a real expense, especially in INTC's case,
so I still like my example<G>. |
