Topic: Growth Stocks

INTEL CORP. $23 – Nasdaq symbol INTC

INTEL CORP. $23 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.1 billion; Market cap: $117.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.intel.com) warned that its revenue in the fourth quarter of 2011 will fall to $13.7 billion, down from its earlier forecast of $14.7 billion.

Factories in Thailand produce half of the world’s computer hard drives, and flooding in that country has led to shortages. As a result, computer makers have cut production and are ordering fewer chips from Intel.

Chip sales should rise over the next few months as hard-drive production returns to normal. As well, the shortage will not affect demand for Intel’s more-profitable server chips. Moreover, Intel gets 57% of its revenue from fast-growing markets in Asia, and just 13% from Europe.

The stock trades at just 9.7 times its likely 2011 earnings of $2.38 a share, and at 8.9 times its forecast 2012 earnings of $2.57 a share. Intel will probably raise its dividend in 2012; the current rate of $0.84 yields 3.7%.

Intel is still a buy.

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.