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Petr Message Board

  • musketeernumberone musketeernumberone Aug 23, 2010 1:34 PM Flag

    Tech is greatly undervalued...

    Just look at INTC....

    PPS $18.70
    Trailing PE 11
    Forward PE 8.8
    Quarterly rev. growth 34%
    ROE 22.3
    Dividend yield 3.3%
    Cash $18B
    Cash/Share $3.29

    The chart looks sick as a dog, but the company is doing better than ever... Even if this is a cyclical top (is that even possible in this environment) and all these stats were cut in half, the stock would be a bargain... Other big-cap tech names are in a similar position.

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    • Its been a while but here is a couple look fast as these are moving fast....still dont like the market here.CML and CVLT.

    • I chime in here.

      As much as I think it risky to be long in this market. I don't particularly like the big caps... save AAPL.

      I've been riding the cloud computing plays:
      RAX VMW AKAM.... GOOG is also a biggie in the cloud, but I don't own play that one.

      I find it safer to be long CPL GG PAAS TZA. I still like the MLP's.


    • Is that why SSG is up 10 days in a row?
      Wake up.
      America's owners are a tricky bunch, and they don't give a #$%$ about you!

    • Hi guys, thanks for your great tech insight . I was also surprised with intc buying mcafee.. , maybe they can make something out of it and positivly surprise us. I think big tech companies are cheap in general , trading around 10 times earnings , compared to the last 10 years , makes sense to me , at least more then when they traded at 40 p/e. I am glad to hear some of you kept some powder , i am almost out. But i have spare $ for one more buy. I am in between msft and csco.
      I will probably go for msft because of the dividend(i think they will raise it soon also)before the close on friday. What do you think ?? I will soon be in a position(new bank) to use some options and WILL be asking for your advice. Thanks!!

    • Your numbers are on... but INTC's PE was based on the last four quarters. Five quarters ago, they lost money. The analyst projection of $2.13 per share in earnings in 2011 would make 2011 INTC's most profitable year ever.

      And I thought INTC was one of these companies that always has top line growth. I was wrong. INTC's best top year for gross revenues was 2005.

      INTC just bought McAfee, which does mostly security software, and I hate that acquistion. I don't like McAfee software. McAfee's existence is built around tie ins to computer companies like Acer and Dell. When I upgraded to Windows 7 on one machine, I had to pay $50 to upgrade my security (and I think it was to mcafee), and that really hacked me off.

      Windows XP was a nightmare for security. Vista was better, and Windows 7 is better still. I used zone alarm as a firewall and AVG for virus protection. Both were free and didn't slow up my system compared to the dreaded mcafee products. Now, Microsoft has gotten into the game, and I use Microsoft Security Essentials (a free download) and do all I can to get rid of the bloated security suites.

      INTC used half of its cash to buy Mcafee, and I think that was a mistake. I have had no use for McAfee products.

      INTC though gives me a good excuse to talk about corporate America in general because I think it provides insight into what is going on. INTC is showing a decrease in gross revenues while net revenues are going up.

      My brother and I were talking last night, and he has been incredibly pessimistic. He is 100% short the whole market. As you know, I have said that the Dow would go to 5000. I am not sure anymore.

      Deflation leads to decreased demand, and decreased demand leads to lower gross revenues. In all fields save health care, gross revenues are coming down. That is a demographic inevitability, but does that mean net revenues need to?? As we see with INTC, the answer is maybe not.

      One of the silver linings of this recession has been higher unemployment which leads to lower labor costs. In addition, deflation means workers are not going to be as militant in demanding higher wages.

      When I ran a medical practice in a Dallas suburb ten+ years ago, Musk, good help was impossible to find. Unemployment around here was 2%, and one health care company quit drug testing because in the words of the administrator "if we screen for drugs any longer, we'd lose half our employees." I didn't feel like my employees worked for me; I felt like I worked for them.

      Now it is totally different. I have been working a little lately and have been turning people away looking for work on a weekly basis. That didn't happen ten years ago.

      One of the interesting things that I learned in the book from Good to Great was "Get the right people on the bus, then figure out where to go.", and I completely agree with that sentiment. Right now, corporate America has the chance to get the right people on the bus for a pretty cheap price.

    • I agree , i own intc , qcom , nok and just got a little msft this morning.

    • Here is a good balanced assessment of the semiconductor industry and stocks:

      *In summary, the semiconductor sector does not appear to be over-valued; in terms of capacity utilization it is running essentially flat out and revenue growth will slow from an unusually strong rate to a more normal rate over the course of the next couple of quarters. Is it too late to invest? Yes, it's too late to take advantage of the big surge in growth rates that occurred during the last year. But the current pessimism of investors could be an opportunity to buy into a hot growth sector at reasonable prices. Keep in mind that bringing on new capacity in the semiconductor industry is not trivial or quick; therefore, high capacity utilization should continue to support prices and revenues, especially for those more complicated or smaller geometry chips where capacity is most constrained.

      The consensus seems to be that growth rates may slow but no double-dip will occur in the semiconductor sector. That's actually a better scenario than most investors seem to expect. Don't write off the semis yet.*

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