Re: The 0.35 micron process - the THIRD PROCESS used for the Pentium - wasn't introduced until 1996 !!
Paul,
Part of what you wrote was correct, although you are a year off on .35 - it was introduced in March of 1995.
But as I searched further, I found information that 486 did share a second process with Pentium. Sorry for the error. Are you sorry for yours?
Now let's consider for a moment a reasonable P/E for Intel. It owns the huge business PC market, but will clearly be facing the first real competition it's ever had within a couple of months - flat to negative growth is expected here. In the consumer / small business market it is now second tier (I know you're sputtering, but walk into any Comp USA, Best Buy, etc. and see whose CPU is in all of the upper end machines). Definitely negative growth.
It's investments, which are primarily tech stocks, have been great for several years, but aren't looking too good right now (no tech stock portfolio is). Looks like negative growth again.
The mid range server market it owns, and it will face only limited competition for another 6 months. Looks like Intel sales will grow with this growing market.
The high end server market which is primarily SUN's was looking like a great growth opportunity while Sparc was stalled at 500MHZ and Itanium was targeting 1GHZ, but with Itanium now looking like 800MHZ when Sparc is 900MHZ, that opportunity is fading fast. Flat sales or slight growth at best.
The whole dot com business Intel has been trying to build has been a real sinkhole for money so far - with no near term liklihood that it will change. No growth there.
Overall it looks like flat growth but continued excellent earnings. Sounds a lot like General Motors - their P/E is 6.5 against an EPS growth rate of 12%.
Post split Intc earnings per share are $1.35 - but one time capital sales account for most of what's above $1. EPS growth rate is listed as a little higher than that other market leader, GM (13% vs. 12%) so let's assign a higher P/E. How about double?
That gives us a stock price of $13.
:-)
Dan |
