Actually, I don't feel that the current runup is due to early anticipation of Merced. I think it's mostly just putting things back to a point from which they should never have left in the first place (e.g. INTC at 100 +/-). What happened in the past 4 months was uncalled for, an extreme over reaction to news far less significant than was perceived at the time. If you bought then, you did great, because it was the classic buying opportunity. Unfortunately, I had some INTCW on margin in one account and had to sell to prevent a margin call, so I am coming back with fewer shares than I had (only 200 shares fewer, however). Also, my wife converted some of her INTCW to INTC in December, which, as it turns out, was way too early, so there are fewer shares in that account as well.
As for the current runup, I think -- I've posted this previously -- that there is a TREMENDOUS amount of computer upgrading of the installed base that has started and will be going on throughout the year. This has been brought on by the lower prices, and by the fact that there are still a tremendous number of 486's, and even earlier models, that are finally being replaced (and we are talking something like half of the installed base, perhaps 40 million systems in the US alone).
I think that results for this year will surprise very slightly (10%-20%) to the upside, mostly later in the year, and I think that the analysts are increasing low on their estimates for the next two years, to the point where I believe that they are 100% off by 2000 (e.g. I'm looking for $10/share, not $4-$5).
I also think INTC is given WAY to low a P/E, and I don't buy any of the "capital intensive" hogwash that you hear as the "reasons" for this. It should be 25-35 given what other comparable (and lots of less-than-comparable) stocks are going for. But it is a mass-psychology issue, and it won't change overnight. |
