To All... Several interesting articles about Intel can be
found at the Economist Magazine site. Go to economist.com
and then perform a search under the word Intel, using material from
16 weeks. The 11/30/96 and 12/21/96 articles are especially informative. The Economist is supposed to be the only magazine
Bill Gates reads on a regular basis. It not only covers politics from an outsiders viewpoint. (presumably less slanted than our biased media), but it also has superb coverage of technology.
A point was made concerning the ability of Intel to suck out the value of the computer, much like some sort of high tech black hole. While other component costs shrink, Intel is able to charge more for the microprocessor. In 1985 they got $50 for a 286, now they charge
$200 for a Pentium, but the entire computer probably costs less. It is
anticipated that by 1998 they will be able to charge $300 per chip,
which resuts in an extra $8 billion on on an estimated 80 million PC's
sold. Personally, I think that 80 million PC in 1998 is on the conservative side barring a world wide recession. I have been told that their foreign sales growth are excellent, approaching 50% in some
Asian countries. On the technical side they are getting outstanding
chip yields.
Does anybody have an explanation as to why INTC stock is so cheap?
I understand that many consider it to be cyclical, that the quality of the earnings may be low because of the way depreciation is handled,
that it is capital intensive etc,etc. Nevertheless it still sell at a
what I consider a very low P/E even cosidering these factors. Why??? |
