Gerald, you are correct when you state that Intel is still a
cyclical stock, but it's "Cycle" is much less "at risk" than other
semi's. (That is the time spent on the low side should be much
less than other companies in the same industry). Your approach
of buying in small doese is a good plan. Are you in Intel DRIP
plan ? This is a great way to buy Intel stock in small doses,
even in fractional shares, without paying broker fees. I joined
the Intel DRIP plan when they initiated it, and it has enabled me
to accumulate more Intel shares than I would've been able to
otherwise, and has lowered the overall risk of buying at the "high"
end. (The only drawback is that the company purchases the shares
once per month I believe). going back to Sal's point,there is some
truth to his statement. If Intel is growing at 30%+ per year, which
it is, and is expected to maintain that rate, (Although it can't
forever), then with a PE of 20, it IS undervalued. No question
about it. (4 Years ago, my Financial Advisor said Microsoft was
overpriced, but I bought several hundred share !. He still thinks
it's overpriced). A couple of other things to consider, Intel has
awesome management and they have the ability to control their
P&L for the most part. Intel is truly one of those "franchise"
companies. Also, one more point, if the company is growing
revenues at 30%+, then profits should grow at an even faster rate
because expenses will not grow as fast. |
