Advanced Micro Devices, Inc. (NYSE:AMD)

CAPS Rating: 2 out of 5

The Company is a global semiconductor company with facilities around the world. It provides processing solutions for the computing, graphics and consumer electronics markets.

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Player Avatar jsquaredco (< 20) Submitted: 11/23/2009 3:33:46 PM : Outperform Start Price: $7.02 AMD Score: -32.52

AMD had be valued as a perpetual option only a few months ago. The corporate shake-up, the spin-off of the fab plants and the clearly transparent release of their upcoming lineup are all positive signs. Remove the litigation risk, the lowering of credit costs from improved bond ratings and you have all the pieces necessary for a robust increase in share price. Yes, they can botch the releases as we've all seen in the past but barring that event, there is simply no way AMD doesn't pick up market share from INTC, especially in the EU. A few percentage points of market share is a game-changer for AMD. Therefore, if you add the marginal value of the business on an operational basis to where the stock was trading as a perpetual option, I believe the fair value is in the $8.50-$9 range, before any new news.

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