COMPANY DESCRIPTION
Intel Corporation (Intel or “the company”) designs and manufactures advanced integrated digital technology platforms. The company also develops and sells software and services primarily focused on security and technology integration. The company operates in Asia Pacific, Europe and Americas. It is headquartered in Santa Clara, California.
ECONOMIC MOAT
Intel’s moat is dug from it’s immense investment in R&D and manufacturing capabilities. Intel’s R&D budget averaged close to $11 billion the last few years. In addition, Intel has a streamlined supply chain, shorter time to market, and the ability to scale promising products more rapidly.
OUTLOOK
Intel posted record revenues for the fourth quarter and full-year 2014 of $14.7 billion and $55.9 billion, respectively. However weaker-than-anticipated demand for personal computers on the corporate side, along with lower inventories across the aggregate PC supply chain and macroeconomic and currency factors in Europe led a general sell-off in Intel. Downward pressures may persist in 2015, however patient investors may be rewarded with above-average total returns out to 2018-2020. The solid dividend is also a plus.
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STRENGTHS
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Pioneering technology
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Continued focus on research and development
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Integrated operations
WEAKNESSES
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Declining margins
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Product gaps in the mobility segment
THREATS
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Decline in the PC market
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Intense competition
OPPORTUNITIES
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Foray into the wearable device market
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Poised to benefit from the growing Internet of Things (IoT)
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Growth in the data center markets
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The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.
