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Eight Reasons Intel Is Best in Class


Management likely to offer an upbeat outlook.

For the last several months, shares of Intel (INTC) have been darting in and out of the $20 to $21 range, but I think it's just a matter of time until the chip giant breaks out and we're looking at the mid $20s. Here are some of the thoughts swirling in my noggin ahead of its fourth-quarter release, which is expected out on the January 14.

1. First, the estimate for its fourth quarter is $0.30. My sense is that it will thump that number by a couple of cents. I also speculate that management will offer an upbeat outlook, or at least a more upbeat outlook about the future.

2. I admit that a little part of me wants to kick myself in the posterior over missing Advanced Micro Device's (AMD) rocket-like trajectory since last spring. But then there's another part of me that thinks it usually makes sense to stick with the best-in-class, and that's Intel (despite the flurry of emails I'm going to get, telling me how fast its chips are and that betting on David over Goliath makes more sense. But I love your passion, AMD bulls, so feel free to opine or vent).

3. Gross margins got a nice sequential goose in the third quarter, and my eyes will be on that line when it releases its fourth-quarter numbers. I'd like to see continued strength there. I'm also hoping that its research & development line comes in as expected.

4. If an institution has jingle in its jeans and wants to increase its exposure to the semiconductors in 2010, my bet is it will look at Intel before AMD.

5. Check out that dividend.

6. Some open-market insider activity on the buy side would sure scratch me where I itch right about now.

I see this company like a mad bull, scraping its hoof back and forth against the ground in rapid fashion just before it charges. It's future is super bright, and its earnings potential down the line is, too.

8. I see this as easily a $25 stock -- maybe $30 -- and feel that sooner or later the investment community will agree with me.

Hey, have a great day!

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No positions in stocks mentioned.

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