Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Can AMD Benefit From FTC Suing Intel?


Effects of lawsuit are uncertain, but Advanced Micro Devices still isn't the better pick.

Christmas is next week and I have so much shopping yet to do. Why do I have this feeling I'll end up being one of those last-minute shoppers you always see at midnight on Christmas Eve on the news? Any ideas what to get my wife? I'm all ears.

Asian stocks took a bit of a hit overnight. The Heng Seng and the Nikkei were off 1.2% and 0.13%, respectively. European stocks were down in early trading, too. And here in the US, we're currently trading lower.

Here's what I'm seeing this morning:

Intel (INTC):
Per the AP: "The Federal Trade Commission sued Intel Corp. on Wednesday, looking to block pricing deals and other tactics the government said the world's biggest chip maker has used to snuff out competition."

Is this Advanced Micro Device's (AMD) big break and/or Intel's Achilles' heel?

1. First off, I have no idea how it's going to shake out with Intel and the FTC. That said, I don't think this is a reason in and of itself to belly up big-time to AMD and to entirely shun Intel (although I do think the outcome could ultimately have some negative effect). When it comes down to it, AMD is like Intel's little sibling, and in my opinion, it always will be. Worse yet, it's a little sibling that needs money.

2. If I were long AMD, I'd consider taking some money off the table at this point. And if I were long Intel, I'd wait to see if it pulls back. But between them, I think Intel's the better pick.

Harley Davidson (HOG):
Justin Sharon points out in his article today that Goldman lowered the company to Sell.

I agree with the rating and don't think I'll be taking a spin in the stock or on one of its motorcycles anytime soon. I think the average consumer is going to be cheap over the next year (maybe longer) and will probably be shopping mostly at places like Target (TGT) rather than spending big bucks on bikes. When the economy finally shifts and average people start having a little extra money set aside for big toys, I might change my mind. But right now, at more than $25, I'm not a taker.

Honeywell (HON):
The Jersey-based company was out with its 2010 outlook.

Per the AP: "Honeywell forecast 2010 earnings between $2.20 and $2.40 per share, including non-cash pension expenses, which is below the $2.50 per share expected by analysts."

Some thoughts:

1. Some may view the news reports as a bit of a disappointment but I continue to like this company. It's coming off a better-than-expected quarter, it's expected to show high single-digit growth in the next five years, and it's got a pretty sweet dividend.

2. All that said, I think any hand-wringing over 2010 on the heels of this news could present an interesting opportunity for patient investors with a decent time horizon.

Safeway (SWY)/Kroger (KR):
Bank of America/Merrill has Neutrals on these companies, and I agree. I see upside to supermarkets long-haul as Walmart (WMT) can't be everything to everyone all the time. But right now, there seems to be a lack of catalysts and entirely too much competition.

Have a great day! It's almost Friday!

Buzz & Banter - 30 top traders sharing their ideas and insights with you in real-time. Take a FREE 14 day trial today.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos