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

To: Mo Chips who wrote (48556)	2/24/1998 5:13:00 AM
From: Khris Vogel	Respond to of 186894

I do believe that it is very dangerous to pay a premium for a stock relative to its earnings growth, which when you get to over 25, is starting to get high for intel. If it's PEG you're worried about, consider this: Intel's historical sales growth rate over the last ten years has been 29.7%, and EPS growth rate has been 35.8%. Those kind of numbers tend to make a PE of 25 kosher, I'd think. If were to be somewhat conservative, and say that INTC was going to see earnings growth of "only" 18%/year for the next five years, that would put us out to EPS of $8.85 for 2002. Again, being conservative, let's assume a PE of 19.2 (the avg. high PE over the last five years), that gives us an assumed price of over 170. But let's say you assume a 20% EPS growth rate, you'd be looking at earnings of $9.63 in 2002. And if you throw out the effects of where Intel traded at in 1993 and 1994 (when the PE's reached highs of only 14.4 and 12.5 (laughable, isn't it?), and use the avg. high PE for '95-'97, which would be 22.9, you'd quite possibly be looking at $221 in 2002. Using the more coservative numbers, you'd be looking at an avg. return of only 12.8%, which is all right, I guess. But it's just that, those numbers are ultraconservative, IMO. And I would think the potential upside more than outweighs earning less than 13% on your money. This is, to me, a stock I'm comfortable just putting away and not fretting over the day-to-day. It's future is just too bright. As far as my portfolio, my top 2 holdings are intel and cisco. So, if you're an Intel holder, what's been your point?