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Strategies & Market Trends : Stock Attack -- A Complete Analysis
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To: Claud B who wrote (3534)10/2/1997 7:23:00 PM
From: Chris   of 42787
 
to all: Info on INTC

Subject: "IDEA OF THE DAY"-Trading in&out for profits.

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To: J.T. (10534 )
From: Timothy Lamb Oct 2 1997 6:48PM EST
Reply #10546 of 10547

JT and Thread:

Some INTL comments. I've been wrong before on this type of research but I have always liked this company. Today I purchased some call options. Please don't follow my lead on this. Do your own research and invest at your own risk. Buying the stock or warrants is a good long term investment. The options carry much more risk.

INTL - Why I'm bullish.

1) Read the H&Q REPORT DATED September 8, 1997 below (from Ibexx on the INTL thread). A little different spin from the Merrill Lynch Kurlack report where TK thinks INTL will come in below his 92 cents.
2) Read Brain's economic posts on how well the economy and electronics is doing.
3) The electronics indicate strong circuit board production (i.e. chips - of course IBM, TXN, MOT, HWP, etc. also make chips but I'm partial to the company that has a near monopoly on its CPU chips)
4) T. Kurlack of Merrill Lynch has been wrong on numerous occasions most recently on MU and his record with INTC is spotted.
5) CYRX and AMD are NOT making inroads into INTL's territory. Not this quarter anyway. Both have had production problems. They sell their chips for 25% less than INTC not because they want to or because they're more efficient (actually they are probably less efficient, AMD clearly is) but because the market will not buy their chips unless they are priced lower (also tests indicate the new AMD's don't perform as well as similar INTC chips. )
6) Rumors have it that INTC can't meet demand from the top PC vendors (CPQ, IBM, DELL). Of course INTC probably spread this rumor to help in its defense for not meeting DEC's requirements .
7) No early warning. (never a reason to invest).
8) New products released in third quarter.
9) Expect positive comments with the earnings report on the migration to the 25 micron process from the 35 for 4th qtr and 1998. Means more efficient manufacturing to fend off competition.
10) Management has a good track record.

Downsides.
1. Kurlack can be right this time.
2. The FTC lawsuit (long term issue not this quarter).
3. The DEC lawsuit (another long term issue, not this quarter).
4. Germany and Japan. Actually this will be a drag but without a forewarning I don't think it offsets U.S. sales.
5. Lower margins. INTC has managed this in the past through increased sales.
6. ??

The analyst comments who actually visited INTC is in the next post

Tim.

Subject: "IDEA OF THE DAY"-Trading in&out for profits.

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To: Timothy Lamb (10531 )
From: Timothy Lamb Oct 2 1997 6:51PM EST
Reply #10547 of 10547

The HQ INTL report.

Also, I recommend reading some of Ibexx and Paul Engel's technical comments on the Intel thread.

INTC: Raising Estimates and Instituting New Price Target of $120: Reiterate Buy Rating

SUMMARIES:

* We are raising our Q3 EPS estimate to $0.97 from $0.87 and our 1997 EPS projection to $4.05 from $3.85.

* We believe that Intel is benefiting from strong North American PC sales particularly from leading suppliers such as Compaq, Dell and IBM.

* We estimate 9% sequential CPU unit growth for the September quarter but 7.4% in revenue growth due to a declining blended average selling price (ASP) for microprocessors.

* Next-generation process technology migration to 0.25 micron is progressing very well as the company is expected to announce today (that was yesterday--Ibexx) that it is in volume production of Tillamook notebook microprocessors.

* We reiterate our BUY rating on the shares of INTC and assign a new price target of $120 based on 25x our non revised CY98 EPS of $4.75.

Tim
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