Andrew Simon, 23, San Francisco
Tip for Beginners: Do your research. Find companies that have valuable assets, aren’t loaded with debt, and have a competent management team that can take them through the economic downturn.
My favorite holding: Intel Corp. (INTC)
Why I like the stock: With a large portion of the corporate and consumer market corned, coupled with the fact that the tech industry is growing, not shrinking, Intel will soon be back on the rise. Intel’s top competitor, AMD Inc. (AMD) recently announced its plans to restructure the company to reduce expenses. These plans primarily involve the termination of employees, contract or program terminations, and facility closures. Meanwhile, Intel has plans to build a new factory to begin mass production of their newest chips. While AMD plans to reduce manufacturing output, Intel is receiving rave reviews on its two newest processors.
The Professional Opinion
Strong Buy: 13
JoAnne Feeney of FTN Equity Capital Markets Corp.:
“We remain cautious regarding the second half of 2009 because signals of a seasonal increase in end-market demand have yet to materialize. Longer term, we view Intel as likely to deliver results outpacing the broader economic recovery. The company released its next-generation mainstream server CPU (central processing unit) at the end of March, code-named Nehalem EP. This product closes the architectural gap with AMD by adding an on-board memory controller (AMD did this in 2003). Experts are enthusiastic about this new CPU, and anticipate higher sales of servers as a consequence. Intel’s high-end version of Nehalem is not due until the first quarter of 2010, although it was originally expected by year-end. It looks like Intel has worked out the bugs. We remain positive on the shares.”
Eugene Profit, Profit Investment Management:
“Intel’s last quarter earnings came in eight cents better than Wall Street estimates, even though revenue fell 26% year-over-year. The problem with that is basically people like to see revenue going up. By cutting expenses Intel’s growth margins were a little bit better and we know that demand is down because of the economy. You’re starting to see computer inventory bottoming out. Because you’re going to have computer upgrade cycle starting even though you have a weakened economic environment, Intel will benefit because the inventory of semiconductor chips are very low. There’s going to be and increase in the demand for Intel chips. It’s rated a hold, because with revenues down, that’s a concern. But the reason they were down has as much to do with the weak economy as anything else.”