I wrote an analysis of Intel a few weeks back, and I liked the fundamentals. The company is mature, world-wide, low debt, and produces cash ever year. It controls 70% of the worlds microprocessor market, and it is a great brand.
The stock has been pretty lousy for the past few years, and a lot of that comes from the worlds cooling demand for computers. There was a great run-up in the previous 2 decades, as computers and internet access became vital to every home and office in the world. But demand slowed, the market crashed (twice) and Intel has been stuck between the high teens and high 20’s for the past 5 years.
But I see huge new demand coming, and I believe Intel will be a beneficiary of this new market : Smart Appliances. Before, computers were our main access point to the internet and applications. Now, everything from cell phones to tablets to printers can acess the internet and run programs, and that number is only going up.
Check out these articles on Intels newest bet, smart tvs.
This is only the beginning. Pretty soon there will be smart thermostats, smart coffee makers, and smart ovens. With Intels control of the processor market, and their top rated R&D department, I think they are in a position to reap the rewards of these new markets.
Full Disclosure: Long on INTC
Smart appliances certainly already exist, but I agree that they will become more and more widespread, and that chip companies would benefit from it.
ReplyDeleteI'm bullish on Texas Instruments as well.
I haven't yet checked out Texas Instruments. I read on Buy Like Buffet he liked AMD, which is trading at around 7 right now.
ReplyDelete