Thursday, December 31, 2009

INTC Intel Corporation Inc.

INTC Intel Corporation Inc.

The worlds largest chip maker. For you Luddites, we are not talking Doritos or Cheetos. They make microprocessors and platform solutions fro PCs and their claim to fame was the design of the X86 processors that were and still are everywhere. With annual sales of 32 billion, they are nearly four times the size of their nearest competitor, Texas Instruments or more appropriately more than 6 times the size of AMD, Advanced Mirco Devices.

I knew who they were and had played them in 03 buying in around 15 and getting out at 22. I got back in during 2005 at 21 and watched the stock trade sideways for 12 months when I completely got out of the market in late 06 because I thought the market was going to correct. I was way early on that call.

The portfolio started picking up INTC at the same time it started picking up ARMH, a notable but small chip maker in the UK. It was picked up in the 16-19 dollar range and as part of an inadvertent stop sale in October, some nice gains were taken. I immediately got back in the stock in October and November. Currently (Dec 31, 2009) it is about 4.6% of the Salve Lucrum Portfolio and is up 7%.

The company is huge and as result it is constantly in battles to protect market share while defending itself as a pseudo monopoly. NVIDIA and AMD are always challenging them and that probably won’t change. Intel needs a global improvement in the economy to see 30.00 a share. They throw a nice 2.7% yield dividend. They invest a fortune in R and D and should be making some really cool innovations in the nano processor market in years to come keeping them fairly competitor proof.


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