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

To: Dan3 who wrote (153364)	12/31/2001 12:31:56 PM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Dan, Re: "Just because a stock is a large cap stock doesn't mean it can't go down." I was not arguing the possibility of large cap stocks taking a turn for the worse. Heck, we've all seen it in many tech areas - SUNW, CSCO, LU, etc. But when a stock drops so low, there should be a very good reason. CSCO and LU dropped because of a vast shortfall in the demand for networking and communications products. This has hurt Intel as well, but not as much, since they are only a small player in this field at this point. Intel's largest field, that of microprocessors, is still experiencing high demand. While sales are down from one year ago, uncommon corrections in various markets do happen, and it shouldn't be assumed that it will create a trend. The fourth quarter demand has been much higher than previously expected, so much so that Intel has risen estimates past the high end of their expectations. The fourth quarter turned out being stronger for everybody. Who's to say that demand won't flourish further next year? Intel's future actually looks very good. They are on time in getting their manufacturing facilities online to provide them .13u and 300mm wafer capabilities. They have a potential competitive advantage with Northwood, as Thoroughbred has already been confirmed as a simple shrink of Palomino. 4th quarter demand is good, and ASPs seem to be recovering. Intel is also planning the launch of a number of new products over the next year, including the next generation Itanium and Xeon processors. This is why my argument was that to fall to less than half of its current value would require that Intel have some excessively bad news. FUD from you and Kalkan or Bambs is not going to turn the stock. While Bambs at least has some good arguments to back up his/her assertion, you don't. You're simply riding the same chain of FUD you've had on Intel for years now - and you've been wrong far more than you've been right. Re: "If Intel's stock were priced by the market to reflect its CPU market share relative to AMD, it would be about $2.25. If it were valued 4 times as high as AMD it would be $9. If it were valued to reflect its steady loss of market share, it would drop below $1." This quote proves your inability to focus on reality. It will take more than the empty promises of AMD's loud mouth CEO to convince investors that AMD will be more than a competitive threat to Intel. Through Intel's and AMD's long history, AMD has always been tied to Intel's successes and failures, but the reverse has never been true. Investors have no reason to believe that they need to price Intel by AMD's standards. If you believe for a second that Intel is destined to fall below $1, by all means short the stock immediately. I don't believe, however, that your prediction will ever come to pass. AMD may have gained a lot of strength with some great products and some excellent timing, but recent failures in execution have proven that AMD's One-Hit Wonder doesn't necessarily mean they will continue to have the upper hand. wbmw

To: Dan3 who wrote (153364)	12/31/2001 12:32:20 PM
From: Monica Detwiler	Read Replies (3) \| Respond to of 186894

Dan3 - You Wrote Intel has 3 times the unit sales volume of AMD Now how, pray tell, can Intel have 4 times the unit market share of AMD and only sell 3x the number of units of AMD? Is this your new QuantiMath at work, Dan3? M

To: Dan3 who wrote (153364)	1/2/2002 12:27:19 PM
From: Dave	Read Replies (3) \| Respond to of 186894

Dan, While I was away on vacation, I had some time to read "Damodaran on Valuation: Security Analysis for Investment and Corporate Finance" by Aswath Damodaran. Dr. Damodaran is a highly regarded Associate Professor of Finance at NYU. Anyways, while I was reading a chapter "P/S Ratios and Fundamentals", I started thinking about your debate. On page 254, there is an excerp entitled "An Aside on Market Share" and goes on to say: There are some firms that have focused on maximizing market share as their primary objective function. The linkage between increased market share and maket value is a tenuous one and can be examined using the profit margin to P/S [Price to Sales] ratio framework suggested in illustration 12.6. If increasing market share leads to higher margins, either because of economies of scale driving down costs or increased market power driving out competitors, it will lead to higher value. If the increase in the market share is accompanied by lower prices and profit margins, the net effect on value can be negative. Basically, what Dr. Damodaran is stating is that a corporation should only chase revenues only when those revenues are profitable. Additionally, Dr. Damodaran suggests that the higher a corporations Net Profit Margins are, the higher Price to Sales ratio it will have.