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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: bambs who wrote (153303)	12/29/2001 11:56:02 AM
From: Robert Salasidis	Respond to of 186894

In cyclical stocks, you buy when the P/E is historically highest, and sell when it is at the lows. Not all cycles behave exactly the same, but that is the general idea.

To: bambs who wrote (153303)	12/29/2001 12:16:01 PM
From: wanna_bmw	Respond to of 186894

Bambs, Re: "I think INTC could and should crash to $10 in 2002." It could be quite unsettling if what you say is true. On the other hand, you are assuming that quite a lot of the recent data suggests a developing trend, and I disagree. This year has been anything but "normal" for the industry. Between the failing economy and September 11th, the last few quarters should be considered extraordinary, not trend-setters. Sales are still extremely strong in many areas of the world, and with changes in manufacturing, costs should be going down, not up. Intel has also been buying a lot of companies to complement their new businesses, and I think future purchases will probably be much less (which would put pro-forma earnings back in line with GAAP earnings). Most of the shortfalls in computer demand are temporary. People will still see a reason to upgrade, as many people still have 3 or 4 year old machines that are inadequate for running many daily tasks. I see 2002 being a larger year than 2001, and I also see Intel improving ASPs, while reducing costs. I also see networking and communications markets recovering, which will help Intel's "other" businesses. You of course bring up a lot of good points, and I should give you the benefit of addressing each one separately, but you simply gave a lot to digest. I don't think it's as bad as you might think. If Intel is poised to lose 70% of its current value, then so are a lot of stocks out there that are directly or indirectly tied to Intel. Besides shorting Intel, you might want to consider shorting many others, or even exiting the market entirely. I think the things that could possibly lead to the outcome you suggest is if all of the following happens: if demand for PCs is accelerated further from 2001, resulting in further shrinking of the PC total available market, if Intel is unable to ramp their manufacturing facilities, resulting in further shortages, or the inability to cut costs, if competitive pressures increase to the point where ASPs have to be lowered further, if Intel makes a number of truly bad business decisions with their CapEx funds, and if Intel cannot hold to their current roadmaps, resulting in delays of strategic products like McKinley or Banias. I think it would be a rare tragedy, indeed, if Intel executes so poorly as to succumb to all the preceding mis-steps. One mis-step or another would probably be recoverable. Sure, it might prevent a recovery of operations, but I doubt it would steal investor's faith in the stock so much, that they would put the stock value at $10. You have certainly been one of the largest Intel bears on this forum - and for good reasons - but I think you are going a little too far in your analysis. I think Intel has every possibility to not just break even, but to also pull ahead of their current stock price. Of course, Intel has a better chance of hitting $10 than they do of hitting $75 again at this point, but several years of recovering quarters could get the stock back to its record value. It will take a lot of time, and some good business decisions, but Intel has taken themselves out of messier situations before, and their future product lines are very strong right now. We'll have to see which way things go, but I am still confident enough to be an Intel long. wbmw

To: bambs who wrote (153303)	12/29/2001 1:19:00 PM
From: Tushar Patel	Read Replies (1) \| Respond to of 186894

from the yahoo profile. "For the 39 weeks ended 9/29/01, revenues fell 22% to $19.56 billion. Net income fell 91% to $787 million." So in this largely fixed cost business, if revenues go up 20-25% (~5B dollars) from the depressed levels here, profits might go up as much as several hundred percent from these levels (couple of B). Should that happen, what do you think the trailing P/E will be? What would the fair price be?

To: bambs who wrote (153303)	12/29/2001 8:19:33 PM
From: kapkan4u	Read Replies (2) \| Respond to of 186894

<I think INTC could and should crash to $10 in 2002. I am short currently as a result. It's hard to say how long this money printing, rate cutting, and mass media hype will continue to hold stocks like INTC up...When this market finally wakes up to reality...INTC will be crushed. I expect things to start rolling over with the start of the new year. I think insiders will start locking in gains on big cap tech as many have likely held off realizing gains until the new year. The market will likely puke up some bad earnings and guidance that will lead to a sharp sell off in the first few months of the year. I expect a full out crash by the end of 2002.> Good analysis. Add AMD Hammer to the equation and INTC at $5 by the end of 2003 is a real possibility. For the last couple of weeks I have been accumulating $20 Jan 2003 and 2004 puts in INTC. I am not normally a put buyer, but I like my chances here. Kap

To: bambs who wrote (153303)	12/29/2001 8:59:26 PM
From: maui_dude	Read Replies (2) \| Respond to of 186894

bambs, Your analysis is accurate for a given snapshot in time and reflect very linear thinking. Intels business is a very high-fixed cost business. When the revenue drops, most of the income disappears. But the same logic works in reverse. When/if the revenue jumps up, all the profit (and more) returns. BTW, if the revenue doesn't jump up, then Intel can recover a lot of profits and margin back by cutting the fixed cost. Intels revenue is about the 1998 level, when they had 20000 more employees than now. If Intel were to get rid of loss-making units and 20000 people with it (of course that will be extremely painful for the employees), than their earnings can shoot up ~$3Billion. In addition, if the demand is to stay down forever, then CapEx could go scaled down by another $2-$3 Billion. So getting back $5-$6 Billion revenue/profits is doable in the worst case. And that changes the whole picture completely. In this business, there is no gain without taking risks. And the gains can be enormous if the risk succeed. If yo do not take risk, it is certain death. The worst-case situation always looks worse than reality. Look at AMD, almost 2 decades and they have gone nowhere (with respect to their stock price). They know there is a goldmine waiting there. But in order to succeed, they have to keep taking risks over and over again to the point of risking bankruptcy every few years. Looking at PE is a very narrow way of looking at businesses like Intel, IMHO. Maui.

To: bambs who wrote (153303)	12/30/2001 10:00:57 AM
From: Dan3	Read Replies (1) \| Respond to of 186894

Re: This chart of proforma earnings vs. actual earnings That's the first time I've seen that particular ratio layed out in a time series, and it's an interesting one. Thanks for the post.

To: bambs who wrote (153303)	12/30/2001 2:21:53 PM
From: SilentZ	Read Replies (2) \| Respond to of 186894

>INTC's current actual trailing p/e will be between 134 - 230 when they report this quarter Yeah, but how relevant is that? We're in a recession. Intel has done an admirable job maintaining any P/E ratio at all (i.e. staying in the black)... P/E ratio is useful as a relative measuring stick, not an absolute one. -Z

To: bambs who wrote (153303)	12/30/2001 5:30:23 PM
From: Joseph Pareti	Respond to of 186894

>I expect a full out crash by the end of 2002 are you an alias of exhumed Kurlak ? or of Bill Fleckenstein ?

To: bambs who wrote (153303)	12/30/2001 5:46:18 PM
From: Joseph Pareti	Read Replies (1) \| Respond to of 186894

>I am short currently as a result. It's hard to say how long this money printing, rate cutting, and mass media hype will continue to hold stocks like INTC up Translation: crap companies like Intel and Microsoft are just hype and will duly crash, while the real recovery will come from PROVEN companies like AMZN and YHOO. After all, Mary Meeker told you a long time ago this was the real stuff. And, if you started doubting her wisdom, perhaps due to minor details like the bear market, you may just deserve being bankrupt.