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If Intel hits $16, I'm buying

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August 20, 2010 – Comments (7) | RELATED TICKERS: INTC

I passed up buying Intel during the great crash due to a lack of funds. At one point, you could have got nearly a 4% dividend yield out of the stock. Intel is the behemoth in a pretty cyclical industry. It will be able to hang in where others can't, and demand will  most likely go up from here.

Now, Intel has bought McAfee at a significant premium and the stock market is looking a bit shaky. I'm willing to venture that if Intel hits $16, I'm buying. There is a compelling strategic rationale for the McAfee acquisition - security solutions can be integrated right into future chips. AMD and other competitors won't be able to match Intel + McAfee. 

Intel's solid competitive advantages mean that the firm will be able to increase its significant dividend. Unlike all other tech firms, Intel is reasonably committed to returning cash to shareholders - committed enough that it's worth buying for the dividend. 

7 Comments – Post Your Own

#1) On August 20, 2010 at 11:06 AM, Pick1es (26.02) wrote:

I always thought McAfee was a joke, and that only old people bought their products. I couldn't believe that Intel bought them for that rediculous price. Maybe you see it differently?

 -Fear and Bullets

Software Consultant

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#2) On August 20, 2010 at 11:51 AM, sarcaz (32.28) wrote:

McAfee is one of the few companies that have done a very good job at continuing to market new/acquired products and actually integrate them into their central management system (ePolicy Orchestrator).  There are (now many) exceptions, but this results in a lower operating cost for clients using their endpoint protection products.  Those products that aren't rolled into ePO typically at least integrate with it in some fashion.  I consulted for them indirectly for a couple of years but own none of their stock.

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#3) On August 20, 2010 at 12:04 PM, ChrisGraley (28.65) wrote:

It's a play on both cloud computing and the mobile sector by intel.

Smart move in my opinion.

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#4) On August 20, 2010 at 12:13 PM, EnigmaDude (51.51) wrote:

Personally, I dislike McAfee immensely.  Well at least their anti-virus software sucks, IMO.  But it came pre-installed on the Dell netbook that I bought with a 1-yr subscription included so I am putting up with it.  Strategically, I agree with Intel's decision but I would have liked it better if they had gone with Symantec.  Anyway, I am also a buyer at $16.

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#5) On August 20, 2010 at 12:55 PM, Pick1es (26.02) wrote:

as someone who has done numerous cloud computing projects, I am left with the feeling the idea is all BS, just something to tell investors about and a way to take money from the naive. Its all the same technology that we have been using for years just with a new name. 

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#6) On August 20, 2010 at 12:59 PM, rockbox64 (21.70) wrote:

You'll but it if its hits $16, huh?  Wow, you would be very shrewd. Don't plan on owning it anytime soon, then.  I'm waiting for Apple to hit $35 and then I'm backing up the truck.

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#7) On August 24, 2010 at 10:17 AM, weiwentg (97.92) wrote:

Yes, I'll start buying at $16. I don't quite think it's a buy at $18. Remember, it is in a pretty cyclical industry.

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