INTC Intel: All they do is power 80% of all mobile PCs and 70% of servers

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	Henry Chinaski
	South L.A. User since Aug 2009	60
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All they do is power 80% of all mobile PCs and 70% of servers

The original initiated price of this coverage was $19.44. Over the time span of this coverage, the underlying security paid 1 dividend, comprising 0.8% dividend income.

Intel's recent earnings report was a blow-out, the best quarter in their 42-year history. Earnings of $4 billion. Yet the stock now sits below its price going into the earnings release.

To me this is emblematic of the weird disconnect going on in Wall St. Where the best indicator of a company's performance and expectations for the future (earnings reports and conference calls) are thrown to the wind because of one analyst's musings.

The most recent catalyst for INTC's share price to fall was this gem:

R.W. Baird’s downgraded Intel to neutral, citing “a sharp deterioration in PC-related order trends over the past week, following a below-expectation July.”

This was on Aug. 10. I have a few words for R.W. Baird analyst Tristan Gerra. Mr. Gerra:

One week of data does not a trend make. This company just made $4 billion in a quarter. Intel was co-founded by Gordon Moore of 'Moore's Law' and since then they've made that law come true and been a driving force behind the ushering in of the 'Internet Age'. And you're talking about ONE WEEK of data.

This is exactly the kind of nonsense going on in the market now. Never mind reasoned analysis of price to earnings or price to sales, nothing like that. Some guy says PC orders are falling off a cliff, sell sell!

It's not that I don't think professional analysts are better-informed than the rest of us. But I do question where the accountability is? What would Mr. Gerra's PT score be? How have his predictions fared in the past? Well we have no way of knowing, do we? At least on this site there's true accountability. Transparency.

Back to Intel... so there are some issues with PC maker supply chains. Are computers dead? Is Intel not the market leader in microprocessors? Didn't Apple's Mac platform come back in large part due to its partnering with Intel?

Earnings transcript here:

http://seekingalpha.com/article/214354-intel-corporation-q2-2010-earnings-call-transcript

Oh, also their dividend yield is 3.2%. And they have $18 billion in cash.

A decent article explaining the reasoning behind the downgrade:

http://www.washingtontimes.com/news/2010/aug/10/intel-other-chip-makers-suffer-on-pc-sales-fears/

So look, I'm sure that these analysts know more about this stuff than I do, but I just feel like they, and everyone else, is losing track of the big picture. Intel is still dominant in an industry which is as important as ever. Like Apple, as big as they are, they're getting bigger. My prediction is that once some stability returns to the market, others will begin to see things my way.

To sum things up I'll quote this Stocktwits investor, from Aug 10:

wallstreetbean @TrendRida we're buying INTC as a long term investment as long as fundies look good. We suck at short term trading. :)

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What People Are Saying...

Henry Chinaski said at 8/14/10 12:14 AM Price action was $19.15 -0.30 (-1.5%)

BTW 4B was operating income, net income was 2.8B - still quite a number.

Mike Barkett agreed at 8/18/10 4:19 PM Price action was $19.59 0.06 (+0.3%)

Lots of good things coming out of INTC. I may buy some and/or cover it long when the market is done its little see saw crisis.

Mike Barkett said at 8/19/10 11:05 AM Price action was $18.89 -0.70 (-3.6%)

wow talk about lousy timing on my comment. WTF was the point of spending $8B on McAfee? Good thing I didn't buy yesterday. I'll let this blow over before I buy.

Josh Warner-Burke said at 8/19/10 11:16 AM Price action was $18.97 -0.62 (-3.2%)

Intel to acquire McAfee and move into online security http://www.nytimes.com/2010/08/20/technology/20chip.html?_r=1&partner=rss&e...

David Sachdev said at 8/19/10 12:59 PM Price action was $18.95 -0.64 (-3.3%)

I just bought in at 18.93.

Henry Chinaski said at 4/19/11 4:45 PM Price action was $19.86 0.24 (+1.2%)

Intel pops 6% after-hours on earnings, reporting a first-quarter profit of $3.2 billion, or 56 cents a share, compared with a profit of $2.4 billion, or 43 cents a share, for the year-earlier period. Revenue was $12.85 billion, up from $10.3 billion.