<What's your feel for the appropriate P/E for a company whose earnings growth is competitive with a regulated utility?>
First of all, Dan, few things in this world are linear. You can wrestle with a problem for months and see no improvement, yet finally resolve it in a matter of days or hours. The same is true with regard to Intel's operating growth rates or any other parameter you like to pick on. They will not be linear, don't expect it.
Second, I am not trying to defend or justify Intel's performance or lack thereof, since I do not have any facts. No more than anyone else on this thread or on the "street". Given that, I will agree with many bears that Intel is in some sort of a "pridicament". This may not be a negative, but it is not where the company wants to be. If you agree with my first point, there should be a resolution to this in the near future.
Thirdly, I have a different interpretation of the speculation by some that Intel is using "smoke and mirrors" to achieve it's earnings. While many see this as a negative, like T.A Lafontain(sp) or D Peck, the fact that Intel can manage to squeak out $2.7 billion this quarter should tell you something. The ability to do this (legally, I would hope), is not something that many companies can do. I think this ability is one reason Intel's PE can be much higher than one expects. Consider that AMD was in some sort of "pridicament" last year and all they could show for it were huge losses. Companies have problems; sailing through them with record earnings (while attempting to correct them) shows a unique characteristic about the company. A positive one.
Lastly, how do you compare CSCO or MSFT against AMD in terms of EPS this quarter? Many have brought this up as a clear indication of AMD's superiority to that of Intel.
Cheers,
SK |
