We are going to tell you right here that based on Intel’s (Ticker: INTC) earnings tonight, they are a “value” investment!  Here is summary of their results from the Associated Press – 

Intel’s results topped Wall Street’s forecasts, and the company raised its guidance. Its shares rose more than 7 percent in extended trading.

Intel’s net income was $2.89 billion, or 51 cents per share, in the quarter ended June 26. Analysts expected 43 cents per share. The last time Intel’s quarterly net income topped $2.5 billion was in 2000 during the dot-com heyday, when Internet fever fueled spectacular computer sales.

In the year-ago period, Intel lost $398 million, or 7 cents per share, when it paid a $1.45 billion fine in Europe over antitrust violations.

Revenue was $10.77 billion in the latest period, above the $10.25 billion expected by analysts surveyed by Thomson Reuters.

Intel’s third-quarter forecast was stronger than expected. It said it expects revenue of $11.20 billion to $12 billion. Analysts were projecting $10.92 billion.

Intel’s profit forecast also got a lift. Intel now expects gross profit margin — a key measure of a company’s ability to control costs — of 64 percent to 68 percent of revenue. Its previous forecast was for 62 percent to 66 percent.

Look – INTC earned $0.51/share and they are guiding significantly higher for the next quarter on revenues.  Gross margin is excellent.   Annualize their earnings by multiplying 0.51×4 = $2.04/share.  Their share price in the after-hours is around $22.50.   $22.50/$2.04 = 11.02.   This means that INTC’s forward price earnings ratio (P/E) could be around 11.  Alcoa’s P/E is 21 based on yesterday’s earnings and share price.  That’s why Alcoa closed down from its gap-up open today.  Any investor who buys INTC is getting one of the most successful enterprises that ever existed on this earth at half price compared to Alcoa!

If the market stays stable, at the SMC we are going to buy INTC here in the low to mid 20’s and own them for a while.

You heard it here first – INTC is a value play.  We simply need to see how the market responds to these numbers yet.

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