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

To: wanna_bmw who wrote (86002)	7/29/2002 6:51:24 PM
From: tejek	Read Replies (1) \| Respond to of 275872

Ted, Re: "INTC is hardly undervalued.....in fact its way over valued. As of Friday, the average PE for S&P large/mid caps was 15. As of today, INTC's P/E is 45." Still using P/E is an indicator?? WBMW, "Still"? "Going back to" is actually the more appropriate response regarding this value. Tsk, tsk. This is a value that can easily be reduced by 3x in a year's time for Intel if corporations return to normal spending levels for PCs. That's a big 'if'. The latest estimate is that IT spending probably will come back as early as the second half of 2003 but may be off as late as the first half of 2004. How long do you think INTC will be allowed to have its high P/E in this market? What's more important is a number of other fundamentals. Like what? Re: "The markets usually look six months into the future. In six months, its anticipated that Hammer will be out and INTC will no longer have the performance lead." I think it is only anticipated that way on this thread only. For the rest of the market, performance is a tertiary indicator for stock value (if even that), so I am sure that investors are not dwelling on it too much. Even if you do have performance, you need to be able to market it well, you need to manufacture your product in high volumes, and you need to have stable customers willing to buy those large volumes. AMD still has an uphill battle in all these respects. First, performance does count beyond this thread.....not as much as it once did but it is still an issue. Secondly, when it first came out, the Athlon sold like hot cakes in spite of its lack of marketing and production difficulties. This thread has been too long without the likes of Scumbria if its forgotten about the quality of the Athlon's architecture.......especially when compared to the architecture of the Pentium series. Good architecture sells........why do you think the buzz on the Hammer series is so strong? Re: "That's true during the current product cycle transition for AMD; however, that trend is expected to reverse upon the debut of Hammer." Again, I'm not sure that the market is convinced that AMD will gain back lost share from Intel. AMD is hyping Hammer pretty hard, but it still has not done anything for AMD stock price. I think investors have "wizened up" to the old AMD Hype Engine. If the market were not convinced of AMD's future success, its stock price would be near 1 in this business climate....especially with no P/E. Company hype doesn't sell anymore; product potential still does. Besides, the hype is coming from outside AMD. Re: "I will agree that when the economy rebounds, INTC will have more cash but that doesn't guarantee that Barrett will get savvy and spend it in a way that's positive for INTC.....his history would suggest otherwise." So you're suggesting the possibility of Barrett once again pissing away earnings the moment that the market turns around? What kind of an idiot do you take him for? The typical kind........his BOD doesn't put much pressure on him, the company always makes some $$$ come rain or shine, he talks a good game and can spin really well. In the last 5 years, since I've been watching, nothing has changed at INTC. Yes, in retrospect, Barrett's spending spree was a bad idea, but the basis for it wasn't all that bad. When you have more money than you know what to do with, you throw an amount of it at a target, and see if you happen to hit a bull's eye. His push into web hosting was a joke and INTC lost tons of money. If anyone had done the numbers, there was no way that web hosting could be profitable. On at least three occasions, Intel saved my butt because it stepped in and bought three companies I owned that at best I could have sold for a small profit. And the reason I would have gotten only a small profit is because the peak demand for their chips had passed......they were no longer state of the art. However, INTC stepped in and bid up the price, and I made a very nice profit on all three. INTC ended up jettisoning the chips from the three companies but claimed that their IP was worth the cost of their acquisitions and would benefit INTC.......just one more example of INTC spin. BTW, under Barrett, INTC lost hundreds of millions if not billions due to these questionable acquisitions.....which were rarely accretive to its bottom line. I'm pretty sure that the change in market over the past couple years have made Barrett quite a bit more frugal (just common sense). I doubt it........margins at INTC have slipped dramatically. Had he learned his lesson........INTC would be doing all it could to reverse that serious margin drop and would be cutting fat rather than giving their business a minor haircut. Re: "Did you know since 2 January, INTC's stock is down 57.2% while AMD's is down a lesser 49.7%? I think the markets may be panning your thesis." Did you know that AMD is currently down 83% from its highest close price, while Intel is down a lesser 75%? Amazing what you can "prove" with random statistics, isn't it? Actually, my figures weren't random nor were they so dated. I tried to pick a mutual peak for both stocks since the first of the year......and coincidently both peaked at the beginning of the year. And you would know that if you had been less concerned with spin and more concerned with the implication of what the gap in those two numbers means for INTC. BTW, for the first nearly 9 mos. of this year, INTC's PC division was coming off one of its best periods in a couple of years in terms of share and chip performance while the opposite was true for AMD. And yet INTC's stock did not perform nearly as well as AMD's. There's a message in that divergence between INTC's positioning and its stock performance at which you might want to take a closer look. ted