Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: lanac who wrote (64032)	9/6/1998 2:01:00 AM
From: lanac	Read Replies (1) \| Respond to of 186894

here is more from another manager from the PRUDENT BEAR fund he speacilizes in shorting stocks he perdicts INTC at mid 40's soon Those who agree might want to piggyback on Tice's short-sale ideas-or at least lighten up on the issues on which he's bearish. Gateway 2000, the lovable South Dakota maker of personal computers, is one such stock. At a recent price of $45, it was selling at 21 times consensus earnings for 1998. Yet with prices declining for powerful PCs, Tice argues, "this will turn into a commodity assembly business." Gateway is opening Holstein-spotted Country Stores, which Tice fears will raise overhead and legally establish Gateway's presence in states that will then demand sales tax on sales to their residents. An economic downturn would crimp capital spending, adds the analyst, and leave investors to discover that a PC, after all, is a capital good. Gateway's share price, from $45, could be halved, warns Tice. He puts Intel in the same boat. Most of Intel's growth is coming from its lower-end chips, so average selling prices are declining, and with them, profit margins. Historical gross margins of 60% are trending toward 50%, and Tice sees them falling to the mid-40% range. "They've always been able to move the customer along to the faster PCs and sell the higher end chip that generates larger margins," he observes. "But that game is over." A spurt in PC sales won't bail out Intel, Tice claims. Dramatic price cuts in 1996 spurred 30% annual growth in PC unit sales, he notes, but even today's falling prices haven't juiced unit growth above 10%. Microprocessor clones from Advanced Micro Devices and the Cyrix division of National Semiconductor have just enough market share to weaken Intel's pricing power at the low end, where demand is strong. In the past six months, Intel's year-over-year earnings are down 30%. Tice thinks 1999's numbers will be even worse and that Intel, now in the high 70s, would be more fairly valued in the 40s.

To: lanac who wrote (64032)	9/6/1998 8:38:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

lanac - Re: ". Intel's unit sales were estimated to be down by a couple of hundred thousand, year-over-year, in that quarter, while Advanced Micro Devices were up by a million -- Intel lost four percentage points of market share in the period. Yet the stock is up on the year. It's hard to believe. " These brainiacs NEGLECTED to MENTION one ADDITIONAL IMPORTANT FACT: Intel EARNED A PROFIT of $1 Billion Two Hundred Thousand . AMD registered a LOSS of $105,000,000 BEFORE a partially offsetting TAX benefit. Making Money is still the name of the game. Paul