If you think about it, its quite shocking. Intel spent roughly $5B!! on share buyback the past 2 quarters and most of it is going to some form of employee compensation plan (options, employee stock purchase, etc.). Shares outstanding has stayed roughly flat. I mean, why doesnt Intel cut back repurchase to $3B or $4B, and hike the quarterly dividend to $.16.
This just looks bad! I'm very suprised Paul O. and the Intel BoD doesnt get criticized for this strategy by the large investors. I'm certainly writing a letter to them.
Again, I have no problem with Intel's product strategy/execution for the most part. But, its more about changing Intel's "brand" in the investment community to get the stock moving, and things like this dont help.
I think the reasons INTC's stock is being "held down" are temporary. As new, cheaper chips are made, and cost cutting takes place to counter lower margins, Intel will begin to rise. However, the results are approximately a year away. We're all right in thinking Intel stock should be on the rise, simply premature. I remember thinking the same thing about Monsanto. They had great products, great ideas and a lousy stock price. It took TEN YEARS before their stock price was where it should have been in the eyes of its stock holders. The problem with Intel, is, in my opinion, simple: No one wants to wait, even though they're getting a fat dividend for doing so. (JMHO)