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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: techreports who wrote (46104)	9/2/2001 6:50:12 PM
From: Apollo	Respond to of 54805

Intel...... what kind of revenues can Intel expect to generate from these chips that will go inside servers? When Intel rolled out its new business model, going after higher growth markets, about 1-2 years ago, it indicated that the world had only about 1% of all the servers that would be needed. Of course, that was at the zenith of universal hype. Nevertheless, if they're only wrong by 50%, that's still a market that could see spectacular growth in the next 5 years. apollo full disclosure.......I still own some Intel, and may be looking to get back in to more.

To: techreports who wrote (46104)	9/2/2001 7:00:26 PM
From: Seeker of Truth	Respond to of 54805

"Why do you think Intel is too expensive now?" I consulted Yahoo and saw that the brokers consensus expected earnings for this year is 0.51. The consensus growth rate for the next 5 years is 18%. We know that these growth rates tend to be too optimistic but let's assume not only that the 18% is correct but that also that it will continue for another five years after that. Let's be still more generous and assume that the 0.51 is all free cash flow. These assumptions give us free cash flow of $2.67 in 2011. I assume that this will sell at 20 times earnings or $53.39. That's almost but not quite double today's price. I think we can do better than 7% a year elsewhere or by waiting and buying INTC at a lower price. The 20 times earnings arises from two more assumptions: 1 That money will be earning 5% on short term deposits in the bank in 2011. 2. That INTC will have become an ordinary company by then, selling at ordinary prices, the gorilla status having become history. Obviously some or all of these assumptions have to be wrong to some extent but maybe not so wrong that we don't get the feel of the general situation.