Joseph, RE: 55 cents is only one penny ahead of consensus
But in this case, more significant than just a penny. Numbers have been coming down recently. On top of that, the thread's favorite foil, Dan Niles, has increased the stakes this morning, cutting his quarterly estimate further, to $0.52. On top of that, in a strange bout of posturing, he actually stated that he didn't think that Intel would hit his revised number, and thinks that $0.51 is more likely. It appears that $0.52 is what his model spit out, but his 'sources' think the number is $0.51. (He also cut his '99 and '00 estimates, to $2.19 and $2.40 respectively. As a comparison, Joe Osha's #'s at Merrill are $2.41 and $2.96.)
This goes back to one of my longstanding theories that if you like a stock long term, you hope that you stock slightly misses analysts' estimates. In this specific example, if Intel just misses and posts $0.51, the long term potential of the company really hasn't changed, but the stock price will most probably drop a decent amount, giving you the opportunity to buy shares more cheaply. The converse is also true. If you don't like Intel, you hope they post a number around $0.56, giving you the opportunity to sell shares a little higher. (The reason I say 'slightly' is that if Intel were to post a number of, say, $0.30, it would be hard to say that the long term outlook for the company is unchanged, and you would have to make an adjustment to the long term prospective earnings.) |
