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Intel Corp. (NASDAQ:INTC) is an excellent bellwether company. I expect all these companies to continue to do well over the longer term. Unfortunately, we just may have to wait for a while before taking positions. My four selected peer companies are: Texas Instruments, Inc. (NASDAQ:TXN), Taiwan Semiconductor Limited (NYSE:TSM), Broadcom Corp. (NASDAQ:BRCM), and Advanced Micro Devices, Inc. (NYSE:AMD).

For guidance, I compare most all securities that I review with their industry group bellwether-company like INTC. When the securities I valuate reach a high ranking (within my three disciplines) I buy them confidently. My three disciplines are all weighted; fundamental (40%), technical (35%) and consensus opinion (25%) analysis. You will note in my comments that I lean heavily on these three methods of doing my security's analytics.

Each of these companies is in of sync with regard to balancing their fundamentals with their over-bought technical condition. Saying this in another way, they all have excellent fundamental current valuations, and their technical trends are in tack. However, the present technical risk is much too high to consider taking bullish positions in today's market. These four companies and Intel are each valuated and rated below with comments. They are not candidates for buying or short selling at this time.

The twenty-year chart of Intel Corp. and the S&P 500 SPDR offers an important perspective for investing wisely.


(Click to enlarge)

The stock market is continuing to do what it loves to do. Lately, that means it is both fundamentally and technically very fickle. What many investors often forget is that what appears to be a fact is; in reality, very creative fiction.. The fictional stories being told by Wall Street, the media and nearly all financial analysts are so compelling that the average investor takes the hook, the line and the sinker most every time. That is a fact, and it is a very sad way for these businesses to do their expected job of helping investors prosper.

Earning growth estimates for these companies are positive for the near-term; however, the longer term is questionable. Please note the exceptions as noted in the below valuations. Over the years, the way "The Street" will reward or punish any company in the future is never certain. It appears that the long-term upside is very strong for these and a number of other second tier semiconductor companies. I prefer to invest in what I call the "second tier of semi's." These big guys just don't have the profit potential of other companies in this dynamic industry group.

My analytics, to a large degree, has to do with comparative analytics and much on-going research. The process of comparing these five companies with their other peer (semi's) is what makes my work a daily fun and profitable experience.

The current position of the s industry group both domestic (U.S.) and international is quite favorable on my comparative ranking list of well over 200 industry groups. Over the short-term, this industry group definitely qualifies as favorable. Normally, I would expect the majority to hold up well during the coming months. The current problem is the condition of the general market. It is over-valued, over-bought and the bears seem to be making a move. The shares of nearly all the component companies in this industry group should likely be considered for purchase only at the conclusion of the anticipated bearish pull back in the marketplace. Over the longer-term I am also quite positive about other industry groups in the technology sector.

Five Fundamental Valuations with Comments


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Current Valuation of: Intel Corp.

Current Price:

$27.6

Comments: These are not overly strong Valuations and Target Price Projections. When I do further fundamental studies, the results neither improves nor declines. Projected earnings growth for INTC indicates there will be a strong increase through 2014. The technicals are currently ranked as, "very good" as are the consensus opinions.

This suggests that INTC will continue to be a longer-term winner.

Security's valuations should be updated and studied as frequently as possible. This work may or may not offer positive support or perhaps a negative warning! I do not recommend buying INTC in the current market cycle.

Target Price:

Plus 6+% / minus 15+% from the current price.

Trailing P/E:

11.7

Forward P/E (fye 12/ date):

10.3

PEG Ratio:

1.11

Price to Sales:

2.54

Price to Book:

2.92

Return on Investment (R.O.I.)

22.0%

Valuation Divergence:

(minus) - 18% from current the price.

Current Valuation of: Texas Instruments, Inc.

Current Price:

$30.70

Comments: These are positive Valuations and Target Price Projections. When I do further fundamental studies, the results definitely improves. Projected earnings growth for TXN indicates there will be a strong increase through 2013. The technicals are currently ranked as, "good" as are the consensus opinions.

This suggests that TXN will continue to be a longer-term winner.

Security's valuations should be updated and studied as frequently as possible. This work may or may not offer positive support or perhaps a negative warning! I do not recommend buying TXN in the current market cycle.

Target Price:

Plus 4+% / minus 20+% from the current price.

Trailing P/E:

19.9

Forward P/E (fye 12/ date):

12.9

PEG Ratio:

2.20

Price to Sales:

2.62

Price to Book:

3.18

Return on Investment (R.O.I.)

12.8%

Valuation Divergence:

(minus) - 12% from current the price.

Current Valuation of: Taiwan Semiconductor Limited

Current Price:

$15.40

Comments: These are poor Valuations and Target Price Projections. When I do further fundamental studies, the results do not improve. Projected earnings growth for TSM indicates there will be a strong decrease through 2015. The technicals are currently ranked as, "very good" but the consensus opinions are average.

This suggests that TSM will continue to be a longer-term question mark.

Security's valuations should be updated and studied as frequently as possible. This work may or may not offer positive support or perhaps a negative warning! I do not recommend buying TSM in the current market cycle.

Target Price:

Plus4+% / minus 20+% from the current price.

Trailing P/E:

16.2

Forward P/E (fye 12/ date):

13.6

PEG Ratio:

1.08

Price to Sales:

5.49

Price to Book:

3.55

Return on Investment (R.O.I.)

24.4%

Valuation Divergence:

(minus) - 22% from current the price.

Current Valuation of: Broadcom Corp.

Current Price:

$33.80

Comments: These are average Valuations and Target Price Projections. When I do further fundamental studies, the results remain sanguine. Projected earnings growth for BRCM indicates there will be an increase through 2014 and then a sharp drop. The technicals are currently ranked as, "poor to good" as are the consensus opinions.

This suggests that BRCM will continue to be a longer-term question mark.

Security's valuations should be updated and studied as frequently as possible. This work may or may not offer positive support or perhaps a negative warning! I do not recommend buying BRCM in the current market cycle.

Target Price:

Plus 6+% / minus 20+% from the current price.

Trailing P/E:

24.1

Forward P/E (fye 12/ date):

10.7

PEG Ratio:

1.54

Price to Sales:

2.56

Price to Book:

2.67

Return on Investment (R.O.I.)

10.5%

Valuation Divergence:

(minus) - 20% from current the price.

Current Valuation of: Advanced Micro Devices, Inc

Current Price:

$6.78

Comments: These are weak Valuations and Target Price Projections. When I do further fundamental studies, the results decline. Projected earnings growth for AMD indicates there will be an increase through 2013. The technicals are currently ranked as, "poor" as are the consensus opinions.

This suggests that AMD will continue to be a longer-term loser.

Security's valuations should be updated and studied as frequently as possible. This work may or may not offer positive support or perhaps a negative warning! I do not recommend buying AMD in the current market cycle.

Target Price:

Plus 4+% / minus 20+% from the current price.

Trailing P/E:

n/a

Forward P/E (fye 12/ date):

7.62

PEG Ratio:

n/a

Price to Sales:

0.76

Price to Book:

4.73

Return on Investment (R.O.I.)

- 18.7%

Valuation Divergence:

(minus) - 28% from the current price.

Source of raw data: Yahoo Finance.

Notes for the above tables: Target price is calculated and produces a probable range of the current price over the coming one to three months. Valuation divergence is calculated and produces a plus or minus percent of price over the following three to six months after a given bullish or bearish inflection point.

Data change over time, and therefore valuations must updated frequently.

Second Tier Semi's That May Valuate Well Later This Year

These are companies that I have reviewed for possible purchase at the next bullish inflection point.

International Rectifier Corp.

(NYSE:IRF)

Fairchild Semiconductor Int'l, Inc.

(NASDAQ:FCS)

Atmel Corp.

(NASDAQ:ATML)

SanDisk Corp.

(NASDAQ:SNDK)

ON Semiconductor Corp.

(NASDAQ:ONNN)

Cree, Inc.

(NASDAQ:CREE)

PMC-Sierra, Inc.

(NASDAQ:PMCS)

Source for raw data: Yahoo Finance

Summary

Semiconductors is currently a very strong industry group that will do well in the next bullish time frame. Presently all five of the companies are trading in sync with its fundamentals and technical charts. That means it is in favor with my analytics. However, the prospect of near-term price appreciation is questionable. I suggest that any valuation and technical opinion that is not totally positive are sufficient reasons for you to consider holding cash.

Currently, these semiconductor companies are not all that positive. This is also a warning about most all semiconductor companies.

I suggest your taking a few minutes to study my 20-year chart. Taking a longer-term view of a security's price history will help with your annual profitability.

Conclusion

I am bearish on both the economy and the general market. My recent postings in Instablog are focused on securities that should not be held in your portfolio. It is important for you to understand that holding cash during questionable time frames is a wise choice. (This is definitely a "Questionable" time frame).

Source: Valuations For Intel And 4 Major Semiconductor Companies With Comments