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Intel
Though the yield is much lower at just 2.5%, the story of Intel is similar in many ways to Ford. This is a company that has seen big-picture pressures from the decline of PCs and the rise of mobile, as well as specific issues, such as competitor Advanced Micro Devices stealing server market share and that its next-generation 10-nanometer process technology may not deliver as hoped.
However, these are certainly not new items to anyone who has been paying attention. And by some measures, Intel stock has priced in enough negativity to make its shares a pretty decent value play.
Case in point: The stock trades for about 10 times next year’s earnings, about a third of AMD’s valuation and well under the forward P/E of about 17 for Texas Instruments Intel also trades for about three times total sales, compared with almost five times sales for Broadcom and almost six times sales for Texas Instruments
With over $14 billion in cash and short-term investments on top of over $22 billion in annual operating cash flow, Intel is well-capitalized and had a broad enough reach to weather any short-term pain. And with shares up more than 10% from their 52-week low in October, there are signs that the worst of Wall Street’s negativity is now behind this stock. For another boost, Intel said Thursday that it approved a $15 billion buyback program. (Intel had $4.7 billion remaining under an existing repurchase program as of Sept. 29.)
Though the yield is much lower at just 2.5%, the story of Intel is similar in many ways to Ford. This is a company that has seen big-picture pressures from the decline of PCs and the rise of mobile, as well as specific issues, such as competitor Advanced Micro Devices stealing server market share and that its next-generation 10-nanometer process technology may not deliver as hoped.
However, these are certainly not new items to anyone who has been paying attention. And by some measures, Intel stock has priced in enough negativity to make its shares a pretty decent value play.
Case in point: The stock trades for about 10 times next year’s earnings, about a third of AMD’s valuation and well under the forward P/E of about 17 for Texas Instruments Intel also trades for about three times total sales, compared with almost five times sales for Broadcom and almost six times sales for Texas Instruments
With over $14 billion in cash and short-term investments on top of over $22 billion in annual operating cash flow, Intel is well-capitalized and had a broad enough reach to weather any short-term pain. And with shares up more than 10% from their 52-week low in October, there are signs that the worst of Wall Street’s negativity is now behind this stock. For another boost, Intel said Thursday that it approved a $15 billion buyback program. (Intel had $4.7 billion remaining under an existing repurchase program as of Sept. 29.)