Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 48.26

-0.7%

Feb 5 3:59 PM EST

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To: Fred Fahmy who wrote (4243)	10/15/1996 7:31:00 PM
From: Harry Landsiedel	of 186894

I agree with you that WS has made a big mistake on treating Intel like the commodity semiconductors. The reason many sophisticated investors put a lower value on companies like Intel is that they calculate "owner earnings", which is profit plus depreciation minus capital spending. So they look at "owner earnings per share" rather than the conventional EPS. With high capital spending Intel's "owner earnings" are considerably below their EPS. However, for the long term investor these differences should not be a deterrent, particularly when you consider the franchise that the investment in fabs brings to Intel. Also when you have Intel's pricing power and and 85%+ share, it sure is easy to justify a 25 PE going forward. (particularly when investors give Coca Cola a 37 PE with a 15% growth rate. HL

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