Well that is a hypothetical portfolio evenly distributed with fake $$ based on my SA writings. Some of those in the green I have never held like AAPL, GME or XRX. Before anyone asks why the answer is I'm no Jamie Dimon (joke) and available cash is finite (no joke).
My personal holdings are not balanced and probably weighted too heavily toward the focus stock on my website;Telular (WRLS) which is a small cap stock but is doing very well as seen in the SA record. The yield is very good, low debt but being a small cap carries much more risk. They have done extremely well over the last few years and I have a detailed article at: http://bit.ly/YjdEQp for those looking for income and can tolerate a higher risk profile.
WT, thank you for the reply, my mistake. I was referring to the change in 2012 expectations of $2.55 based on the guidance at the time then going to $2.00 expectations going forward based on a reduced 2013 share count. What the actual buybacks are in 2013 can be debated. I suspect the share count could be lower so we'll see where it goes. That said the program I use projected positive growth in EPS & cash past 2013. Good but not as good as previous long term projections.
Of course if projecting long term growth was an exact science the market would always be efficient as far as pricing since we would all be working off the same number. It seems more art than science at times which is why I usually incorporate the chart titled, "DCF & Modified Graham Analysis" presenting a what if range. I also include various factors on each stock as far as discount rates, margin of safety etc., etc., that the reader can see on the website. I do this so the reader can decide if I'm too conservative, optimistic etc., based on their own viewpoint.
Probably a little more than you care to know but since this article has generated a lot of website traffic I thought it might be of interest to others.
One other note about earnings. Thinking about the massive capex eventually flowing through the depreciation line could effect earnings growth (but not cash) in the shorter term.
I'm always interested in others views where they think Intel's longer term growth rates are going. Longer term being about a 5 year average.
Thank you Uain53, I'm no techie but the additional $2B in capex is to start building their first 450-millimeter development facility. The remaining capex which is equal to 2012 is in part (and I quote portions from the CC): "...to finish up the 14-nanometer factories and begin deployment of the construction of and equipping of the 10-factories, we need those factories principally for our view of the computing market, and in that that would include tablets and certainly the data center....the start of the investment and 10 nanometer...., it's really building for units that we expect in 2014 and 2015 because that’s where you start to see the peak of 14 nanometer and the start of the ramp of the 10."
WinGreen, good points. They had this to say at the cc concerning data center: "In 2012, we built on the strength of our data center offering and we expect to return to double-digit revenue growth in 2013."
mgordon10, that's a fair question. At the time the base EPS estimate as shown in the guidance table above was $2.55 along with higher FCF growth. What has changed is a huge drop (over 20%) in EPS guidance, huge and unexpected increases in capex leading to lower FCF growth over the longer term. Headwinds at least for 2013 if not just in the PC market but macroeconomic headwinds leading to a substantial reduction in longer term growth rates which has a major effect on fair value.
Is the Intel guidance now within the ballpark? We'll see but the past is another reason why I chose 1% to represent what management terms as low single digit revenue growth in 2013.
This is also why I give links (in the article) to detailed quarterly and yearly financial data I complied in one place so investors can use this data in their own decision making if they like or just look at the numbers both past and projected and make their own determination to agree or disagree.
That said if you want to see my ugly calls along with very good ones I try to be transparent about it and post a record for all SA articles to see at: http://bit.ly/HM8oY1
I've had a few whoppers but INTC isn't one of them. The record is based on the first article and stays as long as I consider it not a sell. The original article I did on Intel was in April 2011 http://bit.ly/T5Y1dm
I noted earlier that nothing remains static (especially with investing) and as or if the fundamentals change in unexpected ways so will valuation. Everything hinges on long term growth rates. I've liked and owned INTC since the first article but I am more interested in the dividend. If INTC continues to drop and fundamentally nothing has changed I may consider adding more, mostly for the generous yield. Sorry for the long winded answer but hope it helped.
WT. I thought it was obvious from the article. At the time it was 26 look at management's guidance at the top of the article. EPS guidance has fallen over 20%, FCF is reduced. Nothing remains static (especially with investing) and as or if the fundamentals change in unexpected ways so will valuation. Everything hinges on long term growth rates. Look at the chart presented titled, "DCF & Modified Graham Analysis". If the reader such as yourself dislike these rates the chart shows what this analysis might look like at various other rates by adding or subtracting 100 basis points from each metric point. Sorry you found the article not very helpful, useful, etc.
David, I agree completely. I only used the term to refer to those looking for shorter term gains in the stock price and are not interested in dividend investing. I am more of a longer term dividend investor which is why I am long INTC, although I suspect you were replying more to Archman.
Thank you Archman. I would agree that INTC may be dead money through 2013. The stock is close to fair value. I think the dividend is very attractive so it depends on the type of investor one is. Those who do not invest for dividends probably are not interested in this stock.
However that said 2013 could provide some good opportunities to buy in at a more substantial discount and a higher yield. Any downdraft in the markets due to fear the US politicians will continue to fight, kick the can down the road, shut down government etc. usually provides short term opportunities. I find myself routing for these situations to occur but that's another story.
Cranky, you may be right but its too early IMO to count out Windows. The products that use the full power (like touchscreen), innovation in tablets or what I'll call Hybrids is just emerging. Intel, along with MSFT should do well if it starts to take hold especially in tablets. Should have a better feel for this by the second half. We'll see.
Telular: A Value And Dividend Growth Story In The Making [View article]
For a different take SeeThruEquity issued a WRLS report on 12/18 with a target price of $12.76. The report is free but one has to sign-up to download it.
Teva: A 'Show Me' Stock That May Show Patient Investors Profits [View article]
Toneguru, How do you get negative FCF?? FCF is cash from operations - capex. Last year was 3B; TTM for Q3 was about 3.3B.
Also from the 12/11 investor meeting: "So we believe that over the next 5 years, we will generate organically, this is the organic view, cash flow from operation of between $4.5 billion and $5.5 billion per year. What are we going to do with this? What every company does, dedicate a pretty healthy part to business development, return cash to shareholders between $1 billion to $2 billion. I don't know if everybody realizes but in 2011 and in 2012, Teva has returned close to $2 billion per year to shareholder between our buyback program and dividend payments. And we're going to continue to do that. We will service our debt, dedicate about $1 billion to debt service, and we continue to invest in our infrastructure.
Windows 8 (MSFT) receives a big vote of confidence from the DoD, which says it will deploy the OS as part of a massive deal with Microsoft that covers nearly 75% of its ~450K personnel. Many enterprises and institutions have declared themselves uninterested in adopting Win. 8, whose new UI makes many IT departments uneasy. However, some IT security experts have argued the OS' new features, such as Refresh and Secure Boot, will make it more secure than Win. 7. Office 2013 and SharePoint are also covered by the deal. (PR) (Argus downgrade) [View news story]
Per the link given the DoD agreement also includes Microsoft Office 2013 and SharePoint 2013 Enterprise.
What Is Wrong With Intel? [View article]
My personal holdings are not balanced and probably weighted too heavily toward the focus stock on my website;Telular (WRLS) which is a small cap stock but is doing very well as seen in the SA record. The yield is very good, low debt but being a small cap carries much more risk. They have done extremely well over the last few years and I have a detailed article at: http://bit.ly/YjdEQp for those looking for income and can tolerate a higher risk profile.
What Is Wrong With Intel? [View article]
Of course if projecting long term growth was an exact science the market would always be efficient as far as pricing since we would all be working off the same number. It seems more art than science at times which is why I usually incorporate the chart titled, "DCF & Modified Graham Analysis" presenting a what if range. I also include various factors on each stock as far as discount rates, margin of safety etc., etc., that the reader can see on the website. I do this so the reader can decide if I'm too conservative, optimistic etc., based on their own viewpoint.
Probably a little more than you care to know but since this article has generated a lot of website traffic I thought it might be of interest to others.
One other note about earnings. Thinking about the massive capex eventually flowing through the depreciation line could effect earnings growth (but not cash) in the shorter term.
I'm always interested in others views where they think Intel's longer term growth rates are going. Longer term being about a 5 year average.
What Is Wrong With Intel? [View article]
"...to finish up the 14-nanometer factories and begin deployment of the construction of and equipping of the 10-factories, we need those factories principally for our view of the computing market, and in that that would include tablets and certainly the data center....the start of the investment and 10 nanometer...., it's really building for units that we expect in 2014 and 2015 because that’s where you start to see the peak of 14 nanometer and the start of the ramp of the 10."
There is more on the CC at:
http://seekingalpha.co...
What Is Wrong With Intel? [View article]
What Is Wrong With Intel? [View article]
"In 2012, we built on the strength of our data center offering and we expect to return to double-digit revenue growth in 2013."
What Is Wrong With Intel? [View article]
Is the Intel guidance now within the ballpark? We'll see but the past is another reason why I chose 1% to represent what management terms as low single digit revenue growth in 2013.
This is also why I give links (in the article) to detailed quarterly and yearly financial data I complied in one place so investors can use this data in their own decision making if they like or just look at the numbers both past and projected and make their own determination to agree or disagree.
That said if you want to see my ugly calls along with very good ones I try to be transparent about it and post a record for all SA articles to see at: http://bit.ly/HM8oY1
I've had a few whoppers but INTC isn't one of them. The record is based on the first article and stays as long as I consider it not a sell. The original article I did on Intel was in April 2011
http://bit.ly/T5Y1dm
I noted earlier that nothing remains static (especially with investing) and as or if the fundamentals change in unexpected ways so will valuation. Everything hinges on long term growth rates. I've liked and owned INTC since the first article but I am more interested in the dividend. If INTC continues to drop and fundamentally nothing has changed I may consider adding more, mostly for the generous yield. Sorry for the long winded answer but hope it helped.
What Is Wrong With Intel? [View article]
What Is Wrong With Intel? [View article]
What Is Wrong With Intel? [View article]
However that said 2013 could provide some good opportunities to buy in at a more substantial discount and a higher yield. Any downdraft in the markets due to fear the US politicians will continue to fight, kick the can down the road, shut down government etc. usually provides short term opportunities. I find myself routing for these situations to occur but that's another story.
What Is Wrong With Intel? [View article]
What Is Wrong With Intel? [View article]
Telular: A Value And Dividend Growth Story In The Making [View article]
Telular: A Value And Dividend Growth Story In The Making [View article]
http://bit.ly/URzgyk
Teva: A 'Show Me' Stock That May Show Patient Investors Profits [View article]
Also from the 12/11 investor meeting:
"So we believe that over the next 5 years, we will generate organically, this is the organic view, cash flow from operation of between $4.5 billion and $5.5 billion per year. What are we going to do with this? What every company does, dedicate a pretty healthy part to business development, return cash to shareholders between $1 billion to $2 billion. I don't know if everybody realizes but in 2011 and in 2012, Teva has returned close to $2 billion per year to shareholder between our buyback program and dividend payments. And we're going to continue to do that. We will service our debt, dedicate about $1 billion to debt service, and we continue to invest in our infrastructure.
Windows 8 (MSFT) receives a big vote of confidence from the DoD, which says it will deploy the OS as part of a massive deal with Microsoft that covers nearly 75% of its ~450K personnel. Many enterprises and institutions have declared themselves uninterested in adopting Win. 8, whose new UI makes many IT departments uneasy. However, some IT security experts have argued the OS' new features, such as Refresh and Secure Boot, will make it more secure than Win. 7. Office 2013 and SharePoint are also covered by the deal. (PR) (Argus downgrade) [View news story]