jmac, I'm sure about 65,000 INTC employees and millions of shareholders agree with you. There was an interesting sidebar in an article in the Worth magazine that was devoted to INTC a couple years ago. The guyz' conjecture was that when the revenues from the newest generation of chips exceeds the revenue from its predecessor the stock leaves its flat trading range and runs up to the next level. Perhaps we saw that recently with P3 vs P2. Copper Mine has been delayed twice and Andy says it won't come out until mid-2000 now, so we wait. As for problems they have several:
1, RMBS 830 chip set fiasco,
2, order cancellations and drooping PC sales,
3, Taiwan produces 80% of the world's motherboards and who needs Pentiums without a board to stick 'em on,
4, entering Internet server farmie thingie or whatever and new business areas always take longer to pay off and cost more than expected,
5, AMD's Altheon completes at high end and not just the low end so chronic margin reductions,
6, messing with imagers for last several years and will probably never make any serious money at it, and
7, retooling for 300 mm wafers ongoing and will be expensive.
I'm sure there's more and I'm sure that INTC will remain profitable and remain the world's largest CPU supplier albeit with a shrinking market share. Short term the stock's going down.
Here's an early warning sign that gives a great signal for writing INTC covered calls. INTC execs don't hesitate to fire people and cut costs when they "perceive" a slow down coming, not even loosing money just a flattening or slow down in profits, especially with Craig "the Ice Man" Barrett in charge now. At the first sign that they're firing people you know they know they're in trouble. INTC management euphemistically calls it redeployment which amounts to musical chairs where all the losers get fired because management can't be bothered transferring people. The ghouls on Wall Street probably see this as a good thing for the bottom line but it never makes up for the shortfall in earnings growth. For a view from the other side of the fence visit Former and Current Employees (FACE) of Intel at faceintel.com
I see from your personal profile that you like to sell INTC CCs. I did well with that the last couple of years but then you have those times when INTC just smokes and you get your stock called away after INTC runs $30-40 above your strike price. I now prefer to buy INTC and INTC calls on dips.
Where do you see INTC's stock price going and why? |
