Bob
thank you, today ML stated that there would be little impacton q3 earnings
due to higher than financial gains
Regards
-Albert
ps and something that many here would love to see:
Intel Drop Seen as Buying Opportunity for Optimistic Investors
9/22/0 15:17 (New York)
Intel Drop Seen as Buying Opportunity for Optimistic Investors
New York, Sept. 22 (Bloomberg) -- Intel Corp.'s record share-
price drop has some investors lining up to buy.
``I love panic -- these are exciting times to take advantage
of,'' said Howard Ward, manager of the Gabelli Growth Fund. ``Long-
term investors should be taking advantage of this. If there are no
further adjustments to this year, earnings will still be up nicely
year-over-year for Intel.''
Intel, the world's largest computer-chip maker, late yesterday
warned that third-quarter sales will lag forecasts on slack demand
in Europe. The shares tumbled as much as 24 percent, their biggest
decline in history, erasing about $100 billion in market value and
sending other computer-related stocks plummeting. Volume of 268
million shares made it the most actively traded stock ever.
The company's sales and earnings are still rising, and some
investors said Intel is big enough to ride out the whims of the
personal-computer market, where it gets about 85 percent of
revenue. The shares are poised to rebound as Intel adds products
for fast-growing areas like wireless and networking appliances,
they said, making the stock's drop today an opportunity to buy.
The shares fell 12.92 to 48.56 in late trading. With the stock
trading at 28 times next year's earnings, investors said it's cheap
enough to wait through a quarter or two of slower growth and the
stock will recover, as it has after past slowdowns.
``It's worse than expected, but you don't sell it here,'' said
Noah Blackstein of Dynamic Mutual Funds, which owns the stock.
``You sell at 70; you don't sell at 45 or 46. Intel will rebound.''
Forecast
Intel's third-quarter sales will rise 3 percent to 5 percent
from the second quarter's $8.3 billion, spokesman Tom Beermann said
yesterday, less than some analysts' forecasts for growth of as much
as 10 percent. Shares of PC makers and related companies tumbled on
concern that industry sales will disappoint in the second half,
when back-to-school and holiday shopping usually bolsters demand.
PCs represent only part of the picture for Intel's future,
investors said. The Santa Clara, California-based company is
broadening its offerings, building new chips for networking and
wireless gear that connects to the Internet in a bet that consumer
devices will need powerful processors to support new audio and
video applications on the Web.
``I am not worried about Intel at all,'' said Lucien Ruby of
Crown Advisors Ltd., which owns Intel shares. ``There's not a
better company in the world.''
Rocky Road
Intel shareholders have held on through bumpy rides in recent
years as the stock rose and fell on expected changes in PC demand.
After the chipmaker's last warning in March 1998, shares fell 13
percent the next day.
That warning came after demand had fallen as Asian currencies
crashed and consumer confidence tumbled. Investors that held on
since then have reaped the rewards -- Intel shares have more then
doubled since the 1998 warning, adjusted for two stock splits.
The slowdown in Europe stems from increasing concern about
local economies that have crimped consumer and corporate purchases.
Though Europe is a major hub of PC demand, the shortfall there
isn't as significant as the Asian crisis, investors said.
``This is not as bad as the 1998 warning,'' said Todd
Ifkovits, portfolio manager at Detroit-based Jay A. Fishman Ltd.,
an investment counseling firm that owns Intel shares.
The euro has declined about 7.6 percent against the dollar
since June 30. Without the effect of converting its sales outside
the U.S. into dollars, Intel could have posted higher revenue,
investors and analysts said. In addition, the Group of Seven
nations intervened for the first time today, joining forces to buy
euros in an attempt to stem the currency's slide.
``Demand in the rest of the world is relatively strong,'' said
analyst Stephen C. Dube of Wasserstein Perella Securities. ``I
think there should be a relatively quick rebound from the situation
in Europe, still sluggish growth but not as bad as we see right
now.''
Ifkovits, a longtime Intel shareholder, said he's seen
``temporary supply issues'' before and his confidence isn't shaken
now. He's not alone in his support.
``There are many times it's been down 10 to 15 percent over
the years due to various deviations in PC demand,'' said Gary
Nussbaum, a portfolio manager at Peregrine Capital Management with
$5.5 billion under management.
Taking a Risk
Analysts disagree about whether Intel's warning signals
trouble for the chip and PC industries. Intel hasn't been able to
make enough high-end processors to meet demand this year, and some
say that's still the case.
Though some companies have scaled back their expectations for
growth in cellular phone sales, investors said consumers are still
snapping up electronics gear and the holidays will boost sales of
electronic organizers, game systems and even PCs. Evolving
technologies and new functions for those machines will propel
chipmakers back on top, they said.
Louis Kokernak, senior equity strategist at Martin Capital
Advisors, sees a time to take a risk. His firm is borrowing money
to buy shares that mimic the tech-heavy Nasdaq 100 Index.
``We're making a bet the market is going to recover,''
Kokernak said. ``It's a fairly bullish move for us. October '98 was
the last time we've done it, and that really paid off.''
Some investors also expect quarterly earnings reports from
Dell Computer Corp., Compaq Computer Corp. and other PC makers that
will show demand isn't as bad as naysayers think. Analysts have
noted better-than-expected demand for high-end PCs in Asia and
rising sales in the U.S. and Latin America.
``It's the summer,'' Blackstein said. ``The only reason we had
strong demand (last year) is we had Y2K. It's the normal season
stuff.''
Shareholders admit Intel stock is a long-term bet. Kokernak
doesn't expect European demand to pick up until the second quarter
of next year, and many investors are looking for months of
lackluster performance in the stock. Yet when it's all over, they
said Europe -- and Intel -- will rebound.
``If you were on your deathbed and you had to pick one stock,
I'd pick Intel,'' said Crown Advisor's Ruby.
--Cesca Antonelli in the San Francisco newsroom (415) 743-3532, or
fantonelli@bloomberg.net, with reporting by Mike Lovell in San
Francisco, John Stebbins in Chicago, Dina Bass in Seattle, David
Zielenziger in New York and Anthony Massucci in Princeton/jac |
