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Tuesday, March 4, 2008

Intel (INTC) again

Intel (INTC) tells us nothing we don't know -- NAND pricing is bad and it hurts profits. There are companies in Asia that are printing negative gross margins because of NAND pricing. The rest of their business outlook was unchanged and that's the more important element -- business hasn't deteriorated significantly for them this quarter. Citi also says notebooks remain "surprisingly strong."

This stock isn't going to run away any time soon. The foreseeable growth rate is still far below what the P/E is telling you -- this company does not have a 14% compound annual growth rate. You have to give it a slight premium for its monopolistic tendencies. I'd put fair value at $15 and the range at $12 - $20.

What I worry about with Intel is they're going to do acquisitions. They have 15 billion in cash and no growth. That's what they should do. That's all they can do.

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