So there is a reason I’m not posting in /valueinvesting, I recon there would be more people who disagree with me here.
Intel is currently selling at book-value. (even without Goodwill and Other Intangible Assets). “So what?” some of you may say, “Wish is also selling at book value”, or “there are a lot of companies selling under book value”. Now now, calm down lets have a look at this. What does make INTC attractive in that regard:
It is profitable, and the probability of it turning to an un-profitable company for the coming decade are slim.
Although it shit the bed in the last earnings, the whole sector apparently did in this one. Even with that sh*t of a report it is the only Tech company with Net profit margin over 20% with a Book value this low, MU comes close second. except that, 90% of the companies in this filtering are financial.(Which sell at book value for a different reason, I can get into it if there will be interest ) How is this relevant? well we have a lot of companies selling near book value, where the profit margins are slim, obviously because a fluctuation of 10% in the margin and the company is loosing money.
I see the fear in a lot of investors in holding companies which are numb. The low PE and the high DIVY are great, What is the problem? No growth. Intel was is in this position for many years. Right now, with the new CEO yall hate, this is changing. The IDM 2.0 strategy and the CHIPS-act should fuel growth. Check out this fact: Intel is spent more on R&D over the last few years then what AMD, NVDA and TSM did , all together. Which is not to say every penny is well spent, but I guess even a drunk monkey can drive a lambo with enough money or something…
Classic financials: (Good ol’ ‘merican Blue chip, “Blue chips matter”.)
Forward PE – OK even with consideration of priced-in high inflation and high rates.
Pretty low debt with good ability to return it.
Divy- 5.7% ?? too good.
Negative FCF for the quarter – bad sign
Competition is HOT. (good job AMD, TSM, NVDA)
Building new fabs and making them profitable may take years.
*points from comments:
Company may cut dividends
Negative FCF expected for a few quarters
V.. va va va ……value trap
AMD has a growing market share in the DCG compared to INTC (AKA servers)
** some good points you will make in the comments and I will add here because I’m too lazy to make bear case**
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