AMD

I Thought I Made a Mistake

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By Brian Nelson, CFA It was nearing the end of 2015, and I don’t think I was more bullish on a stock than Intel (INTC). In October 2015, I published that “Intel may have a breakout year in 2016.” I liked what Intel had done to keep AMD’s (AMD) back against the wall, and the chip giant was making nice strides in the mobile market against Qualcomm (QCOM), particularly with key phone-maker, Apple (AAPL). I liked the acquisition of Altera in part because the company is a free-cash-flow generating machine with little capital intensity. Field-programmable gate arrays (FPGAs) will continue to reshape the semiconductor landscape, and the Altera purchase will give Intel a leg up. Well, it didn’t take long … Read more

Intel May Have a Breakout Year in 2016

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Intel’s (INTC) third-quarter results, released October 14, didn’t turn many heads, but the company did beat expectations on both the top and bottom lines, performance that was well-received by the market. Revenue generated in the quarter was approximately flat on a year-over-year basis, but the mark did beat the consensus estimate by $250 million. The chip giant’s earnings of $0.64 per share in the quarter exceeded expectations by a nickel per share. It wasn’t a bad showing by any stretch of the imagination, but Intel continues to feel the pain of a shrinking personal computing market, even as optimism flies high with respect to the firm’s 6th Gen Intel Core processors. Revenue from Intel’s Data Center Group, which includes server, … Read more

Microsoft Restructuring Phone Hardware Business, PC Environment Remains Challenging

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Dividend Growth Newsletter portfolio holding Microsoft (MSFT) announced the restructuring of its phone hardware business July 8. In addition to a restructuring charge in the range of $750-$850 million, the company will record an impairment charge of ~$7.6 billion related to assets from the acquisition of the Nokia (NOK) Devices and Services business, which closed just under a year ago. Microsoft also announced it will cut up to 7,800 jobs, primarily in the phone business. The non-tax-deductible impairment charge will be recorded in the fourth quarter of fiscal 2015, which ended June 30, and the job cuts are expected to take place over the next several months. These sweeping initiatives underscore Microsoft’s efforts to refine its focus to meet ever-changing … Read more

The Correction: Draghi; Chip, Telecom Warnings; Oil and MLPs

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The equity markets have been under significant pressure the past few weeks, and we think there is further downside to come. Our view is that the equity markets will be lower than today’s levels within the next 6-18 months, if not tomorrow or next week or next month. We’ve taken profits on cyclicals, and we’ve already closed out the put option hedges in both portfolios for a substantial gain (the latest transaction alert email can be accessed here). Europe appears to be in a giant mess again. The region hadn’t been strong by any stretch of the imagination, but we recently picked up material weakness during Ford’s (F) recent analyst day, which in part prompted us to take a very … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Intel Leaps to $30 Per Share; PC Demand Stabilizing

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Intel (INTC) is one of the most-followed firms on Valuentum’s website, and for good reason: the company is a holding in the portfolio of the Best Ideas Newsletter and pays out a lofty 3.3% annualized dividend yield at present levels. For our new members, our best ideas are always included in the Best Ideas portfolio and Dividend Growth portfolio. We first highlighted Intel in the August 2011 edition of our Best Ideas Newsletter and added shares to the portfolio in September 2011 at just under $20 each. Though a 50% move upward to its current price is noteworthy, Intel has also paid a nice ~3% annual dividend yield along the way. We attribute the recent acceleration in the firm’s price … Read more

Encouraging News Regarding Worldwide PC Shipments

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You may not have noticed it, but Intel (INTC) has rallied nearly seven points since the bottom established in late 2012 – that’s roughly a 40%+ upward advance through today. On Wednesday, International Data Corp (IDC) released some very good news for the PC supply chain. Though worldwide personal computer (PC) shipments continued to decline during the first quarter of 2014, the pace of the fall was nearly a percentage point better than expected (-4.4% versus -5.3% forecast, -5.6% in the fourth quarter, and -7.3% in the third quarter). Much of the upside surprise during the period came from mature commercial markets as technical support for Windows XP expired. After eight consecutive quarters of declines in worldwide PC shipments, we’re … Read more

PC Shipments Expected To Stabilize

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According to data released by the International Data Corporation (IDC) Worldwide Quarterly PC Tracker on December 2, personal computer (PC) shipments are now expected to drop more than 10% in 2013, slightly below the previous projection of -9.7%. Though 2013 will be the most severe yearly contraction on record, this news wasn’t the key takeaway. Instead, it was expectations for stabilizing demand by 2015 that provided a shot of optimism to the PC supply chain (see image below). Image Source: IDC The commentary provided by IDC was not terribly exciting, but market expectations are closer to the PC going the way of the dodo than stabilizing at just over 300 million units (roughly 2008 levels). We continue to believe that … Read more

AMD Warns Again…The Knife is Still Falling

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Chipmaker AMD (click ticker for report: ) announced Thursday afternoon that its third quarter results will be substantially worse than expected. Revenues will fall 10% sequentially, compared to prior guidance of -3% to -1% declines, with gross margins coming in substantially lower at approximately 31% compared to a previously-expected gross margin of 44%. With the PC business struggling mightily and no presence in the mobility market, AMD’s decline has no real end in sight. We’ve previously noted some excitement regarding the firm’s next generation video game technology, but we see no reason establish a position in the name in the portfolio of our Best Ideas Newsletter at this time. Shares of Intel (click ticker for report: ) have experienced tremendous … Read more