Topic: Growth Stocks

INTEL CORP. $20 – Nasdaq symbol INTC

INTEL CORP. $20 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.6 billion; Market cap: $112 billion; Price-to-sales ratio: 3.3; WSSF Rating: Above Average) is the world’s leading computer-chip maker, with 80% of the market.

The company is combining its operations into two main divisions. These will be organized by function instead of by product. The first, the Intel Architecture Group, will design chips for computers, cellphones and similar devices. The second, called the Technology and Manufacturing Group, will manage Intel’s manufacturing plants.

Most chipmakers focus on either design or manufacturing, but not both. The reorganization would make it easier for Intel to split itself into two companies. However, any potential breakup is probably years away.

Meanwhile, Intel earned $1 billion, or $0.18 a share, in the three months ended June 27, 2009. That’s down 34.5% from $1.6 billion, or $0.28 a share, a year earlier. The latest earnings exclude a $1.4-billion fine imposed by European competition regulators, who ruled in May that Intel illegally offered rebates to computer makers. In exchange, these manufacturers would agree to buy most of their chips from Intel. The company has launched an appeal.

Revenue fell 15.3%, to $8 billion from $9.5 billion a year earlier. However, computer sales during the busy back-to-school shopping season should lift Intel’s revenue to around $9 billion in the current quarter.

Intel is a buy.

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