Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: niceguy767 who wrote (45693)	6/29/2001 10:39:58 AM
From: AK2004	Read Replies (3) \| Respond to of 275872

J P Morgan initiated coverage of amd and intel Valuation From a valuation perspective we believe that both AMD and Intel represent reasonable valuations at current levels, though for slightly different reasons. For AMD, on the basis of both Price/Book and Price/Sales, shares of the company represent the best absolute valuation of the group. Shares of AMD have historically traded at a significant discount to both the semi device group and its chief competitor Intel. Having said this, the historical valuation gap is narrowing significantly, as AMD has executed well up to this point of the down cycle and thus been able to gain market share from Intel over the past year. Nonetheless, shares of the company continue to trade at 2.7x book value, nearly a 45% discount to Intel, and 1.4x C02 revenues, a discount to Intel of roughly 76%. Given the company's share gains, as mentioned above, recent product introductions and improved management execution, we would expect the valuation gap between the two companies to narrow. We would be buyers of AMD at current levels. From a relative valuation perspective, shares of Intel, trading at approximately 5.0x book, are approaching 1996 trough valuation levels of 4.92x and are well below 1998 and 2001 trough levels of 6.6x and 5.63x, respectively. From a C02 Price/Sales basis, shares of the company are trading at roughly 6.1x, while in the previous troughs of 1996 and 1998, the company showed Price/Book multiples of 5.7x and 6.4x, respectively. Again, the company is reflecting a relatively reasonable valuation.