I don't think Joey is doubting this. He clearly stated that Intel is a very strong manufacturing companies but has not translated into shareholders value. I was against entering into smartphones/servers markets but now I am seeing why not do it to experiment and see what happens.
RE: Intel management still doesn’t have a clue on how to create shareholder’s wealth. With all their manufacturing innovations, the stock does nothing.
Intel stated that it would use 60% of its “free earnings” for shares buy-back and only 40% for dividend. If the Board decides to stop the buy-back, devoting all the “free earning” to dividend, the dividend will rise from its present rate of $0.90 to $2.25. I believe such an announcement will create some increase in shareholder’s wealth.
That's why it has a low P/E. It's a cyclical stock at the mercy of GDP. In some sense, it's a victim of its own success as it's hard to move the needle on a huge revenue base.
Also, I believe that the worry isn't only GDP. If it was, why are they not guiding the datacenter segment lower?
"the PC supply chain that continues to deteriorate, driven by a combination of poor macro conditions, tablet cannibalization, and a pause before the Windows 8 launch.”
Tablet spending is already large relative to PCs and is growing at 50% vs. -2.3% for PCs.
Ultrabooks at $700 don't offer a good enough upgrade value proposition vs. $400 tablets. This will only get worse when the lower priced tablets start to hit the market with ~$200 Kindles, Nexus-7 and iPad-Mini.
We also don't know the effect of the low-end Windows-RT segment. If the windows-rt clamshell form factors are priced very cheaply, this could affect emerging market sales as that segment is more price sensitive. This may affect AMD more than Intel as Goldman Sachs points out today.
You can disagree with the market and buy more stock. I'm waiting on the sidelines for a better price. I'm not willing to risk capital until I know more about Q4 and Ultrabook end-demand.
there was a decent correlation of intc and S&p 500 till June, after that intc has underperformed. Perhaps this is the question folks (including myself) are asking.