Joey and All,
After having hung out here for about 2 years, this is one
of the posts that, in one form or another, seems repeated
with regularity.....that Intel is not accorded the same
multiple as cisco, msft, dell, ......
I guess at this point i am just resigned to the fact that
intel is not going to be. The PE just doesnt seem to move
beyond its 9-20 range....at least i dont think it has over
the last few years, and I am really not thinking you are
going to get to point where Intel trades at 30x year ahead
estimates. It would be nice, i guess, but i wonder if
i would even hold through that...i would probably be gone
at 25x.
i dont know whether it is the 'high capital costs' arguement
or the 'cyclical industry' arguement or what, but i really
think intel is not due for much in the way of multiple
expansion anytime soon. I remember purchasing shares at about
10x trailing earnings back in early 1996 (i think). At that
point a case could be made (which is why i bought) but
the only case was that it was a the low end of an historical
range....not that the range would expand.
Not really sure where i am going, i guess, except this: I
think that Intel is not going to undergo any significant
multiple expansion unless there is some drastic change in
its business model to account for it. Meanwhile, its earnings
growth is likely to account for the lionshare of any price
movement. My own expectation is that the PE will range from
about 16 to about 20 unless or until the model changes or
the market truly tanks.
Thanks,
J |
