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

To: Michael Bakunin who wrote (73664)	2/14/1999 7:44:00 PM
From: Scumbria	Respond to of 186894

More free computers- theregister.co.uk Scumbria

To: Michael Bakunin who wrote (73664)	2/15/1999 12:35:00 AM
From: Amit Patel	Respond to of 186894

To: Michael Bakunin who wrote (73664)	2/15/1999 12:51:00 AM
From: Amy J	Read Replies (3) \| Respond to of 186894

Michael, It seems like you are seeking a precise mathmetical model to determine Intel's stock price. Let me attempt to create one. Please feel free (anyone on the thread) to modify (even completely change) the model and plug in different numbers. Several of these factors have imperfect answers and each of us may plug in different values. Here's my model : Assumptions: - PE_factor : Earnings (in dollars) grow at 25 percent/year. (Declining ASPs due to sub 1K PCs is balanced by Intel's ability to lower costs and limit ASP drop through higher ASP products like IA-64, Zeon etc. PC shipment growth continues). Assumption is Growth = PE = 25 = PF_factor. - Stock_buyback_factor : Stock buyback decreases E by $8B/$200B (Annual earnings/Market Cap) Assuming half of the earnings is used to buy back outstanding shares, the stock growth factor = $4B/$200B = 0.02. So Stock_buyback_factor = 1.02. So, Stock price = Estimated_1999_Avg_EPS * PE_factor * Stock_buyback_factor = 4.8 * 1.02 * 25 = $122.4 Now, here are the wildcards : - Growth_factor : Some say, the last few years were the worst for semiconductor industry and that that is bound to change soon. Some also say that there will be 1.4 Billion connected PCs in the world in the next 8-10 years (I assume that Intel will provide most of them - without significant decline in ASPs.) Let's assume a one-time Growth_factor of 40% (i.e. 1.40) in an increase of Intel annual profits (i.e. Y2K, int'l recovery, increased ASPs, etc.) - Management_factor : Intel Management vs the competitor's management to operate a company and to provide increasing stockholders value. I would look at the past record and give this a factor of 1.2. - Other_business_factor : Eventual growth in non-PC areas (network cards, VC investment etc). I'll set this factor to 1.1 Here are the downward forces : - failure_factor : AMD is a smashing success and the whole world economy crashes and everybody gets those free-bee PCs and IA-64 is a disaster. failure_factor = 0.8. ;) So, here's the final number for Intel stock price : 4.8 1.02 * 25 * 1.4 * 1.2 * 1.1 * 0.8 = $180 Now, isn't this close to the 12-month average target by the analysts ? Amy J

To: Michael Bakunin who wrote (73664)	2/15/1999 10:24:00 AM
From: xstuckey	Read Replies (2) \| Respond to of 186894

" You can't mean the long-term cap gains rate of 20% is complex. " When I read this, I thought to myself that it must be written by a very young person or an unsuccessful person. Have you heard of alternative minimum taxes ? What about state taxes? I suggest at least two things as absolutely required : 1. Handle taxes on profits of at least 5 times your annual salary 2. Write a check to your government for at least $50,000 at least once Until then, don't deliver any lectures on the simplicity or fairness of our tax codes. Best Trading, X