Intel Stock Analysis - Value Investing INTC

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What does intel do?
So Intel is a big mature company that’s been around for over 50 years.
Simply put, Intel has been known for manufacturing microprocessors, mother boards, processors and graphics chips for PC’s.

Recently, they have been transitioning into cloud and network infrastructure.
They are really right in the middle of the transition into this new space.
But the results have been impressive. This sector now makes up about half of Intel’s revenue.

But there are some issues that they are facing with this transition. Which I’ll address a little later when we look at the latest earning report.

Their main competitors are other semiconductor companies, like AMD and Taiwan Semiconductors. These are big companies, but not on the same level as Intel regarding size.
Revenue over the past 12 months.
INTC made 78 Billion in Revenue
TSM made 39 billion in revenue
AMD made 7 Billion in Revenue

Why are they transitioning?
Mostly because the PC growth days are over. So the company over the past handful of years has been working on the cloud and network infrastructure area as the growth drivers of the future.

And I don’t think they are wrong.
The world of Data is getting more important every year and Intel has already made big strides into this space.
If they can successfully work themselves into this area, well I think strong growth can return.

So why did the share price get hammered?

Well there are 2 reasons why this happened.
Gross margins fell from 59% down to 53%. This I think isn’t a good sign.
There will be a delay of about 6 months to the new 7 nanometer chip they were preparing to release. Ok a 6 month delay, is it really that bad?
Well it means that AMD can gain market share with their own 7 nanometer chip. And this is the big reason why Intel’s share price fell over 15% in a day.

Do I think it is a concern?
Well yes, I do think it is a concern. Anytime the barrier to entry for competition is reduced, well that’s not a good thing.
So I don’t think the share price falling so dramatically was an overreaction.
But we need to look at the bigger picture.
The company is transitioning into stronger growth revenue streams. The cloud and network infrastructure side of the business is showing very strong signs of growth.
So the 6 month delay, although a problem, isn’t going to wipe Intel out. I think it’s a minor setback.

There are going to be some personal changes in the management at Intel and that’s not necessarily a bad or good thing. Time will tell.

But it is clear that Intel has some things to improve and some headwinds they are facing.

So the question remains, are they financially strong and are they a bargain price? Lets do the Intel stock analysis financial review.

In my opinion this is a classic case of an investment that Peter Lynch, Warren Buffet, Mohnish Pabrai all talk about. That is a company that is having a few negative things happen to them, and they have become boring. The share price has suffered and it’s an opportunity to invest.
Fundamentally, the company is far better than the market price represents. and I won’t be worried to invest if I get the price I want because I am getting a good margin of safety.

I’d love to hear your thoughts on this investment as I think a lot of people will think Intel is not a good investment. Did you enjoy my Intel stock analysis?
Hit subscribe if you enjoyed my analyses and see you in the next video.

Видео Intel Stock Analysis - Value Investing INTC канала Andrew Brown