Seeking Alpha

Ray Merola

 
View as an RSS Feed
View Ray Merola's Comments BY TICKER:
Latest  |  Highest rated
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    RSA

    I appreciate your comment. Thank you. This was a primary premise of the article, and a reason I delayed writing this final segment of the series. I wanted to wait until after Intel earnings and see "if the facts had changed." Management provided a heads-up the middle of June or so with the pre- announcement.

    Indeed, apparently the facts have changed.
    Jul 17 10:58 AM | Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Gary

    In 2013, Intel generated $20.776 billion in net operating cash. It posted $9.62 billion net income after tax. Dividing the 2 figures yields a CCR of 216%.

    As noted in the article, one of the things I seek when purchasing stock is the underlying company generates its profits in cash.

    There are few large caps out there with this kind of record.
    Jul 17 10:56 AM | 2 Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Tradestar

    Speaking for myself, I rarely dream about investments. I perform fundamental and technical analysis, do valuation work, and attempt to purchase securities that are below fair value. Sometimes the market doesn't realize fair value when we want it to. But it generally does so. It does take some patience.

    Evidently, some on this comment board bought Intel when it was clearly undervalued and have now realized or sit atop significant long-term capital gains. In addition, we received growing dividends. For those who bought ~$20 a share, the dividend yield is now 4.5%.

    Going forward, we all have the same information from management, from others, and from the reports and news wires. It's up to us to perform the due diligence and determine risk-and-reward. Then put down the cash on it.

    Not dreams, real life. Thanks for reading.
    Jul 17 10:46 AM | 3 Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Thank you BiM

    Good comment. I've owned Intel shares for many years. Indeed, from time to time do attempt to recognize additional income or divest shares via options. Generally, I write OTM options with the objective to retain the shares but keep the premium. The goal is to improve portfolio income by ~2% a year.

    Other times, I may elect to trim a position using options. In these cases, I will set an option closer OTM, or even ITM with the objective of having the shares called. The strike is typically what I would have desired to sell the shares for if a straight limit order. This way, if the stock hits the strike I sell and keep the premium. If the stock fails to reach the strike, then I keep the premium and likely do the same thing the following month.

    One can do the same thing in reverse using put options.

    I accumulated a position in Intel shares during 2010 and early 2011. Now realizing a nearly 50% overall gain, my general philosophy is to scale back a bit. I suspect it will be some time before Intel doubles again; at least from its current $34 perch.
    Jul 17 09:30 AM | 2 Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Sorry to hear you were disappointed, BuffaloBell

    Care to comment why you disliked the article so much? It was part of a series outlining how to identify premier companies; then highlighting how even the best companies' stocks can get overpriced. This article also touched upon the concept of investor flexibility in the face of changing fact sets.

    Two of the three articles in this series received an Editors' Pick. Maybe they weren't all that bad?
    Jul 17 08:49 AM | 5 Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    billcharlesdixon

    Thank you for reading and commenting. I agree that Krzanich has been a strong asset for the company. I like his focus and operational expertise.
    Jul 17 08:46 AM | Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Jason B

    If an investor has a clear understanding of the business, and a good process for security valuation and analysis, he/she should do just fine.

    Why do you believe Apple stock is such a poor candidate for purchase?
    Jul 17 08:44 AM | Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Onya PendragonY!

    You got that one exactly on the head. I wish you continued good fortune for all your investments.
    Jul 17 08:42 AM | 1 Like Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    topcoloron

    Operating technology is a key component for any business. However, leading edge technology does guarantee financial success. Indeed, Intel apparently stumbled with Medfield and Clover Trail, despite being highly touted.

    The Atom Z3480 seems to have been a miss in the handset space. However, the company may make lemons from lemonade. The 3480 may be a good candidate for lower-cost tablet chips. Indeed, this is precisely what Intel is doing with the "contra-revenue" model: attempting to force themselves into the tablet space.

    Perhaps the best investors have the ability to see all legs of a business: operations, technical, business development, and financial. Focusing upon one of those segments to the disdain of the others may be risky.

    Just for the record: The article did note, "Intel is the biggest, strongest, and best microprocessor / chipset manufacturing company on the planet." While not explicit, the implication is that to be the best on the planet, the company would need to have a technology lead in a technology business. You may find similar statements in the other 10 articles I've written for Seeking Alpha, too.

    Good luck with all your investments.
    Jul 17 08:40 AM | 1 Like Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Strong investment, virginia long view

    Likewise, I have owned INTC since 2010. Aflac is my favorite financial /insurance industry pick. I have held those shares long-term, too.

    Good luck with all your investments.
    Jul 17 08:27 AM | 1 Like Like |Link to Comment
  • General Motors: Effects Of The Recalls Will Become Apparent [View article]
    GER

    You wrote, "General Motors delivered 267,461 vehicles in the United States in June increasing its total sales by 1% year over year. Retail sales went up by 1% while fleet sales were up by 2%. According to the company, its US market share in June was 18.8%, up from 16.9% in January before the massive recall."

    Historically, recalls do not hinder forward sales. GM seems to be experiencing a similar trend.

    You indicated, "The additional costs can be estimated to range in between $8 to $8.5 billion. For the first half of this year, the write down for the automaker is expected to increase to $2.5 billion."

    Do you expect the total costs to GM to be $11 billion? If so, how do you arrive at that figure? Other estimates have come in as much as half of that. Seeking new data points. Thanks.
    Jul 17 08:24 AM | 4 Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Thank you for reading, dectra

    I believe you hit it on the head: there's a lot to chew over. Rarely do large cap stocks experience such a big turn so quickly.

    F.A.S.T. graphs' data lags a bit. It's not real-time. Therefore, you are correct. The 2014 "high" is quite a bit greater than what was in the system at the time I wrote the article.

    In defense of FAST graphs, I wrote the article yesterday; and you may have noticed I indicated the price of the stock was about $33.30. The stock closed last night at $34.65!
    Jul 17 07:48 AM | 1 Like Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Thanks for your comments virginia long view

    Remarkably, over the past 3 years, one could have purchased Intel shares ~$20 a share twice. As late as last summer one could have bought shares below $22.

    I concur that Intel has breadth and depth of resources, both economic and intellectual, that are nearly impossible to duplicate.
    Jul 17 07:42 AM | Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    MrMatt

    Do you think the fab facilities capex could ease over the next couple of years?
    Agree that Intel uses its tremendous cash flow and intellectual capital to stay ahead of all competition. The R&D effort by Intel is unparalleled within that industry.
    Jul 17 07:38 AM | Likes Like |Link to Comment
  • Great Companies With Overpriced Stocks: Part 3, Intel Corp [View article]
    Tom

    Indeed, I sold some covered calls several points ago, and got the shares called away last week. I consider it a high-grade problem. Intel has been a long-term core position for a long time. It's paying off big-time, despite years of pundits rapping the company.

    Agree that the shares may be a little ahead of themselves now. I suggested FV at $37 to $38 on 2015 EPS. The stock got to nearly $35 yesterday. Pretty hot stuff.
    Jul 17 07:36 AM | Likes Like |Link to Comment
COMMENTS STATS
3,084 Comments
4,401 Likes