1.
Are their numbers good?
Current Price - $73.44
EPS (estimates) 1999 2000
$2.26
$2.69
Intel’s numbers are excellent! They have a relatively low P/E ratio for the chip sector. Their revenues and profits continue to grow year in and year out. Their gross margin is usually around 50%-60%. The most impressive of their figures is their ratio of assets versus liabilities, as well as the small amount of debt that they own. This is an extremely positive thing for a company. Intel’s projected growth is 31.4 % in 1999 and 19 % in 2000. Estimated growth for the next 5 years is
26%.
2.
Who are their competitors?
Intel’s competitors are as follows:
Advanced Micro Devices, Texas Instruments, Xilinx, LSI Logic, Altera,
Adaptec, and ST Microeletronics.
3.
What is their position in the industry?
Intel’s is the leading manufacturer of microprocessors
with an approximate market share of 80%.
4.
What are their new products/services being offered?
Intel has a variety of new products they have recently unveiled such as the new powerful XEON chip for servers as well as their new Pentium III chips (733 MHz for desktops and 500 MHz for laptops). Who can forget their extremely successful CELERON chips. They are modeled after the old Pentium II’s but can achieve much faster speeds (466MHz) while keeping costs low. They have been a big hit with the under $1000 and sub-$1000 computers. Recently, Intel has got into things other than chips such as networking solutions. As well as hubs, switches, and routers. They have a product that can network all the computers in a house/small business without a network card so that several computers can connect to the internet through one dial-up connection (standard modem). This can also be used with DSL and cable modems. Intel has also been producing DSP (digital signal processor) chips, which are used in electronics such as set-top cable boxes and cell-phones. This will help Intel be included in the rapidly growing broadband industry.
5.
What are some of their marketing strategies?
Intel’s marketing strategies continue to remain
constant…….BUILD BRAND RECONGNITION. Weather
it be “Intel Inside” or CEO Andy Grove dancing around in a shiny metallic
space suit, you can’t miss it – INTEL.
6.
Where do you think the industry is heading as a whole?
The industry is going to continue to strengthen with the
revival of the Asian markets, which account for a large amount of chip sales.
As we carefully step into the year 2000, more and more people are using
the internet for shopping, communication, and work.
As a result the demand for computers should remain firm.
As a result Intel should do quite well considering their existing market
share (80%). Networking is going to
be extremely important in the next few years as well.
7.
What are the company’s strengths?
Intel has many strengths which include cash, market share,
and reputation. Cash enables them
to acquire more companies, which in turn will increase market share.
Market share allows Intel to be in position to control their own destiny,
to choose who they want to sell. Reputation
assists Intel because everyone wants to buy a computer with “Intel Inside”
preferably a Pentium and as a result computer manufacturers want to use Intel
chips if possible at all times.
8.
What are the company’s weakness?
Intel does not have many weaknesses. They have began to diversify themselves in other products and not just computer chips. A weakness that has not affected Intel much is that their chips tend to be a bit more expensive than their cutthroat competitor AMD. Also their P/E has rose bit by bit over the last few years but still remains at healthy levels.
9.
What is your buy opinion in the next six months?
I would recommend buying Intel both for the long run and
short-run. It has come way off its
highs and the 4th quarter tends to be the time to be involved in
technology stocks (except October due to volatility).
What is a buy/sell trigger?
Intel is joining the Dow 30 on November 1st, which would be a buy trigger for the stock. Conversely, 4th quarter earnings come out in December and if they don’t make earnings one should probably sell the stock. If they do, one should buy the stock because it has positive numbers going forward.