SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Intel Corporation (INTC)
INTC 39.37+6.7%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Alan Smithee who wrote (171673)10/21/2002 8:47:38 AM
From: GVTucker  Read Replies (1) of 186894
 
Biggest problem with those numbers: it assumes the "principle". i.e. the price of Intel shares, to stay the same throughout the period, just like they were bonds. That clearly won't work.

If you take his rather absurd assumption that earnings grow at 25% per year, then at year 12, Intel is making $23.3 billion. Even if you use a conservative PE of 10, that puts the market cap of Intel at $233 billion in year 12, more than double the initial state market cap of $96 billion. And when you compare that with a loan with constant principle of $96, there's a rather extreme difference, even with a very high multiple erosion on Intel stock.

There are a whole host of other things that I'd disagree with in the post, such as using trough earnings as a baseline (although the high growth rate compensates for that), but in the basic analysis, comparing a stock and a bond in that manner doesn't work.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News