Recommendation: Buy Intel (INTC)
Key Investment Points
• Appears to be undervalued compared to the market
• Strong Research & Development
• High Dividend .90 (3.97%)
• Future Growth Potential
Industry Overview
•Major competitors (AMD, TXN, ARM, Samsung Electronics)
•Worldwide semiconductor sales were 299.5B in 2011
•The Semiconductor market is highly cyclical
•Intel’s market share in the semiconductor industry is 15.9%,
Samsung Electronics 9.3%, Texas Instruments 4.5%, Toshiba
4.3%, and Renesas Electronics 3.6%
•Intel enjoys an 80.3% microprocessor unit market share. AMD is
the other main competitor.
•ARM Holdings has a 95% market share in the mobile chip industry
Intel (INTC) Company Profile
• 2011 Revenue- 53.99B
• 2011 Net Income- 12.94B
• Full time employees- 100,100
• Intel Corporation designs, manufactures, and sells integrated
digital technology platforms primarily in the Asia-Pacific, the
Americas, Europe, and Japan.
• Intel offers microprocessors, chipsets, motherboards, flash
memory, wired and wireless connectivity products,
communications infrastructure components including network
processors, and products for networked storage.




Texas Instruments - 480 Million
Advanced Micro Devices- 345 Million
ARM Holdings- 63.15 Million
Intel- 2.51 Billion


Stock has fallen about 20% in the past 6 months
On September 7th, Intel announced that its revenue
for the 3Q will be lower than once expected. They
lowered expectations to 12.9 to 13.5 B from 13.8 to
14.8 B.
 Customers are reducing inventories in the supply chain
compared to normal 3Q inventory growth
 Softness in the PC market
 Slowing emerging market demand
Intel purchased 1,700 patents and patent applications from
InterDigital (NASDAQ: IDCC) for $375 million in cash in January of
2012. The patents included 3G, LTE, and 802.11 technologies.
 The Intel AZ210 was the first mobile device powered by Intel. It is
sold in India, UK, and Russia.
 Intel entered an agreement with Motorola Mobility, Inc. Motorola
recently released the Motorola RAZR I with a 2GHz Intel Chip.
 Intel acquired McAfee in 2011

 Intel visions adding security features to its chips and hardware

In April 2012, Intel entered into a definitive agreement with
Cray Inc. to acquire certain assets related to its highperformance computing (HPC) interconnect program
Recently invested $40 million in 10 different technology companies to
“increase utilization of microprocessors between clients and servers”
Ultrabook – shipments to increase to 95 million by 2016
Windows 8
Haswell – to be released in 2013
 “Active-idle” state, where computer thinks it’s awake, but is still
mostly asleep. This allows it to have faster wake-up response
▪ Maximizes battery life
New Atom chips (“Clover Trail”)
 Reduced power consumption
 To be used in tablets along with the Windows 8 platforms
Investment Information
Prev Close:
1y Target Est:
52wk Range:
Avg Vol (3m):
Market Cap:
P/E (ttm):
EPS (ttm):
Div & Yield:
22.68
26.07
21.91-29.27
40,227,900
113.47B
9.63
2.36
.90 (3.97%)
Forward P/E: 10.76
Beta
1.01
SWOT Analysis
Strengths
• Strong Operational Capability
• Robust Research &
Development Capabilities
• Brand Equity
Opportunities
• Strategic Acquisitions
• Positive Outlook for
Semiconductor
• Strategic Growth Initiatives
Weaknesses
• Dependence on Few
Customers
Threats
• Competitive Pressure
• Rapid Technological Changes
Investment Thesis
• We believe the stock is undervalued compared to the market.
The company has a high dividend, a positive future outlook,
and potential growth into the mobile chip market.
Portfolio Placement / Recommendation







Sector : Information Technology
Current Holdings: EMC, ORCL, AAPL, IXN, IXP
Target Sector Allocation: 9.88%, $53,549
Current Sector Allocation: 8.3% , $45,179
Remaining Allocation: 1.58%, 8,563
BUY 350 shares of INTC at a Limit Price of 22.75
(approx. 7,950 , 1.48 % of portfolio)
Holding Period/Exit Strategy: 2-3 years, Consider selling
if stock price rises above $35 or below $14 or if
fundamentals change dramatically