Buying Intel
Summary
- Sent to subscribers this morning.
- Intel announced yesterday that its 7 nm (nanometer) products would be delayed 6 months.
- This after Q2 earnings and revenues exceeded expectations and projecting better revenues for this fiscal year.
- Investors, rational as always, punished INTC stock by dropping it 15% as of this writing.
Yes, Intel CEO Bob Swan says INTC identified a "defect mode" in the manufacturing process and has invested in contingency plans, including using external third-party foundries. (Which might benefit our TSM and TSEM holdings.)
Horreurs! This means instead of early to mid-2022, we will have to wait until late 2022 to early 2023 for this ever-smaller chip.
However, Data Center Group sales were up 43% to $7.1 Billion due to the 47% growth in cloud service provider revenue and the introduction of the third-generation Xeon Scalable processors.
However, Intel's CCG (Client Computing Group, essentially their PC business) gained 7% to $9.5 Billion, driven by notebook demand for those working from home.
However, Memory products unit NSG ( Non-Volatile Memory Solutions Group) was up 76% to a record $1.7 Billion.
However, for Q3, Intel sees revenue of $18.2 Billion and for the full FY 2020, the company is forecasting $75 Billion in revenue, a 32% operating margin, $15 Billion in capital spending, and $17.5 Billion in Tree Cash Flow. This would translate to a $4.85 Earnings per Common Share. At $52, that would be 11 times earnings.
For Intel.
I am buying 350 shares at the current price of $51.04, and entering a day limit order to buy 250 more at $50.15.
Be careful out there!
Joe
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in INTC over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Unless you are a client of Stanford Wealth Management, I do not know your personal financial situation. Therefore, I offer my opinions above for your due diligence and not as advice to buy or sell specific securities.
Analyst's Disclosure: I am/we are long INTC.
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