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Intel Corporation (NASDAQ:INTC) is a truly global technology company and the world's largest semiconductor chip maker. California-based Intel also produces network interface controllers, motherboard chipsets, flash memories, embedded processors, integrated circuits, graphic chips and other related devices. With approximately 93,500 employees and $126 billion market cap, Intel is one of the biggest companies in the world.

The company is among the top dividend stock picks for the next five years. To my surprise, management raised its quarterly dividends by 16% soon after I analyzed the dividend potential of Intel in this article. Intel is among the top 100 list of world's most powerful brands published by Millward Brown. While many of us think of Intel as a chip maker only, Intel also manages an investment portfolio, around $1 billion of which is invested in U.S. Securities. Here is a brief analysis of Intel’s favorite holdings (Data from Edgar Online):

Company Name

Ticker

$ Market Value

% Change Shares

% of Portfolio

% of TSO

MICRON

MU

468,000,000

0

51.8

4.49

VMWARE

VMW

223,107,500

0

24.69

1.99

CLEARWIRE

CLWR

146,666,664

0

16.23

14.89

PACIFIC BIOSCIENCES

PACB

19,034,244

0

2.11

3.19

BCD SEMICONDUCTOR

BCDS

16,920,000

100

1.87

1.69

HISOFT TECHNOLOGY

HSFT

15,447,249

-1.73

1.71

0.16

ASM INTL

ASMI

11,988,254

0

1.33

0.51

HARMONIC

HLIT

2,313,975

-9.99

0.26

0.26

OPNEXT

OPXT

0

-100

0

0

LIMELIGHT NETWORKS

LLNW

0

-100

0

0

MOTRICITY INC

MOTR

0

-100

0

0

LOGMEIN INC

LOGM

0

-100

0

0

Micron Technology Inc. (MU) is a manufacturer and marketer of semiconductor equipments, especially RAMS and memory chips. Micron Technology is among the top 20 semiconductor sales leaders worldwide. With a market cap of $10.93 billion and 26000 employees, Micron is one of the biggest companies in its sector. Micron has a P/E ratio of 7.47 and forward P/E ratio of 7.85. The company has 18.03% net profit margin, annual EPS growth of 1.46%, and EPS growth estimates of 11.75% for the next five years.

David Tepper is also extremely bullish on Micron. The fundamentals look very strong for the company.The five year annualized EPS growth rate was 45.08%. Based on the discounted earnings model, Micron is the best technology stock for the long-run. The graph shows some gaps at $8.5-$9.5 range, which might drag the shares in the first correction. Once that happens, Micron will take a solid position in my portfolio.

VMware Inc. (VMW) provides virtual program engines. EMC Corporation (EMC) is the major stakeholder of VMWare. The high-tech company operates in Virtualization and Cloud Management, End-User Computing, Cloud Application Platform, and Cloud Infrastructure divisions. VMware has a market cap of $39.41 billion. Its EPS growth data is really promising; EPS growth estimate for next year is 18.37%, and the expected EPS estimate for the next five years is 23.92%. The P/E ratio of VMware is 96.46, and forward P/E ratio is 39.50.

While there is great potential in the future of VMWare, the stock is on the pricier side of the market. The trailing P/E ratio of 98.88 shows that growth is already factored in to the stock price. Interestingly, EMC is buying, whereas the insiders are selling large chunks of stocks. There is a huge gap between the $86-$90 range. Similar to Micron, once this gap is closed, it can enter my portfolio as well. In any case, shares have strong support from EMC.

Clearwire Corporation (CLWR) is a provider of fourth generation (4G) wireless wideband services. The company builds and manages next generation high-tech broadband networks used in mobile internet services as well as residential voice services. The company operates not only in the U.S.A. but Belgium, Mexico, Denmark, and Spain as well.

Because Clearwire does not have any profits and is not expected to report profits this year. Annual EPS growth has been negative. Shares were bouncing between $5 and $6, until Intel announced that it will sell up to 10 million Clearwire shares. Even though Intel will own a significant amount of shares after the sales, the stock collapsed instantly, losing 7.5% in a single day. The resignation of CEO Bill Morrow in March also had a negative effect. There are rumors that Sprint (NYSE:S), Clearwire’s major business partner, is looking at alternatives for high-speed services. It is best to stay away from Clearwire until Intel’s and Sprint’s intentions are clear.

Pacific Biosciences of California Inc. (PACB) is engaged in owning, manufacturing and interpreting data from commercialized devices for biological search. The company’s primary focus is on the DNA consecutive market. PacBio has a market cap of $554.92 million.

The company does not have any profits yet. EPS is expected to increase by 19.90% next year, but it is down 51.53% this year. PACB is expecting EPS growth of 30% for the next five years. Investing in young bio-research companies is extremely risky, but can be well rewarding as well. Maverick Capital and Deerfield Management are bullish on the PacBio. Both initiated large purchases, making them the top two shareholders.

BCD Semiconductors (BCDS) is a semiconductor producer in China. According to Finviz, the company has a market cap of $166.76, and a funky P/E ratio of 4.22, whereas the forward P/E ratio becomes 9.22. However, Morningstar offers a net income of $20 million, implying a P/E ratio of 8.

Morningstar also shows a preferred dividend of $24 million, which leaves the common shareholders with a net income of -3 million. Stifel Nicolaus has a buy target of $13, and Robert W. Baird has an outperform target of $14. I wonder how they set these targets? BCD is a small company with too-good-to-be-true ratios. I never invest in any small-cap stock from China. They tend to be extremely speculative, and the accounting practices can be fishy. BCD can be an exception, since it is an ADR (assuming that its numbers are thoroughly checked by professionals) and in Intel’s portfolio.

HiSoft Technology International Ltd. (HSFT): With a workforce of over 4,500 employees, this China-based company has seen distinct growth in these years. HiSoft presents software and hardware quality assurance, software development localization and globalization for program and hardware, program testing, and various other services to both independent software vendors and global corporations.

Market cap for HiSoft is $518 million. It has a P/E ratio of 36.13, and forward P/E ratio of 16.33. Moreover, its net profit margin is 8.23%, and estimated EPS growth for the next five years is 26.05%. Shares fell from a high of $34 to current low value of $17. Assuming that the numbers are correct, with a t-metrix ratio of 7 out of 10, the stock can beat the market. From a technical perspective, there is a huge gap between $25-$30 range, which is expected to be filled at some point.

ASM International N.V. (ASMI) is a Netherlands-based semiconductor equipment provider, which manufactures, designs, and sells apparatus and services to chip-makers. With $2.4 billion of market cap and 18000 employees, ASM is a large-sized company.

Its fundamental data is also promising for investors with 12.18 trailing P/E ratio and 8.33 forward P/E ratios. Moreover, annual EPS growth estimates are of 22.6% for the next five years, and net profit margin of 20.06% are solid profit indicators. ASMI is a highly cyclical stock. However, as chip producers announced record-making profits, ASMI might surprise investors as well.

Harmonic Inc. (HLIT) manufactures, designs and sells system solutions and video products which enables service providers to deliver time-shifted television, network personal video recording, and high-definition television [HDTV]. It also provides its video processing solutions to communications companies, broadcasters and on-line media companies that offer video services. It provides also technical subsidy services to its customers in the world. Solutions include application software products and network management software.

Harmonic has a market cap of $887.05 million. Although there are no profits yet, the forward P/E ratio is 12.37. Expected EPS growth for the next five years is 17.50%. The stock has a high short-interest ratio of 4.25 and short float of 3.63%. Insiders have been selling their shares. I would not buy any shares until they start buying again.

Disclosure: I am long INTC.

Additional disclosure: I might initiate long positions in MU and VMW.

Source: What's in Intel's Investment Portfolio