Seeking Alpha
Long/short equity, deep value, value, growth
Profile| Send Message|
( followers)  

Intel Corporation (NASDAQ: INTC) uses its Digital Signage solutions and innovations to rapidly scale in producing high returns for the enterprise market. According to Jose Avalos, director of digital signage for the Intel Embedded & Communications Group, 61 percent of Intel's signage solutions go toward the retail sector. C.J. Bruno,Vice President and General Manager of Americas Sales and Marketing at Intel, told solution providers during a 2012 Solutions Summit keynote event that the company is investing $12 billion this year alone in R&D efforts.

Intel's market capitalization is $106.12 billion. The EBITDA margin is 41.54 percent (the operating margin is 27.44 percent and the net profit margin 20.63 percent). Twelve trailing months earnings per share reached a value of $2.13. Last fiscal year, the company paid $0.87 in the form of dividends to shareholders. The dividend yield amounts to 4.19 percent. Intel has paid a cash dividend to shareholders every year since 1964. Dividend payouts from the S&P 500 have been good. Dividend-paying stocks have seen healthy share-price gains. Intel stock pays an estimate 4.24% dividend; the Fund was able to acquire shares at around 4.6 times EBITDA and 10 times earnings.

Key Stock Data

Dividend Yield: 4.28%

P/E Ratio: 9.57 Trailing 12 months

Market Cap: $104.11 Billion

Shares Outstanding: 4.95 Billion

Public Float: 4.94 Billion

Interconnected Technologies

The increase in consumer demands today create opportunities based on the ways consumers are interacting to interconnected technologies. Visual retail is the next big step in the evolution of digital signage. High-impact advertising has evolved to cross-channel combination of visual, social, and interactive experiences. Organizations have to meet rapid consumer demands and constantly innovate in technology.

Challenges in Scaling Digital Signage

The digital signage industry still faces challenges. Audience measurement is still nascent and large signage systems require remote management and security measures to prevent attacks. Intel has developed a number of prototypes-including Intel® Intelligent Digital Signage Concept and Intel® Digital Signage Endcap Concept-to showcase potential. Intel also has measurement solutions such as Anonymous Video Analytics. Intel® AMT is built into chips such as the Intel® Core™ i5 and i7 processors remote features.

Digital Signage ROI

Digital Signage is a solid technology investment for Intel. These solutions are able to deliver high returns on marketing investment (ROMI). The investments also benefit in cost savings and driving sales. Applying digital signage solutions meets unique objectives for the enterprise. An innovative digital signage solution leads an organization to brand integrity and maintaining a consistent, unambiguous position in the market.

Several Intel platform capabilities such as scalable CPUs and chipsets reduce the OEM development and system unit costs. Remote management features are able to detect non-functioning displays and get them online faster with lower support costs. Advertising aggregators benefit from declining acquisition and maintenance costs.

There are approximately two million digital signage media players installed worldwide which are expected to increase fourfold to about eight million by 2015. Intel's digital solutions clients include telecommunications giant Vodafone (NASDAQ:VOD). Vodafone chose a solution using Intel® Core™2 Duo processors and Intel® Active Management Technology (Intel® AMT). There are many long term solutions opportunities for growth. Intel-based digital signage can also engage intelligently with consumers through web, mobile and social integration.

Intel is a company that takes pride in its R&D bandwidth capabilities, emerging technologies and moves into new market segments with Digital Signage quickly. The trend in the industry is for digital signage to appear in any type of market. The market is still segmented, however many offerings and much consolidation is taking place. Intel sees tremendous growth opportunity with its channel partners for digital signage.

Intel's stock trades at a 30.4% discount. Intel closed last Monday's trading session at $21.43, down 1.85 percent from its previous close. Intel stock has declined 23.78 percent in the past 52 weeks. The stock shows a neutral trend and is likely to remain so in the short-term. It is expected to face minor pullback in the coming trading sessions and may find support at $21.18. Upon breaching this level, it may go down to $20.23 level.

Intel traded 33.39 million shares in Friday's session, and the stock oscillated in the range of $21.32 and $21.70. Intel Corporation's board of directors declared March 21rst, a 22.5 cents-per-share (90 cents-per-share on an annual basis) quarterly dividend on the company's common stock. The dividend will be payable on June 1, 2013 to stockholders of record on May 7, 2013.

Source: Intel's Digital Signage Solutions Scale