Transcript (auto-generated)
All right hello and welcome everybody to other stocking on spare but today we’re talking about intel took us about intc this company is traded on the nasdaq currently so is one of the stocks that’s definitely more interesting for us to talk about as is a tech company we do like to talk about these kind of companies every so often is essentially these are some really strong growth stocks potentially i also want to talk about the long-term value of this company too as a value investor i like to look into you know long-term value of this company talking about intrinsic value price turns book value etc i also want to talk about how this company makes its money and just get into a little bit of the technicals of how this company really works so anyway if you like this video please do like and subscribe if this is about our channel and let’s get this content out to more people so that more people can understand how intel works and also all of the stocks that we talk about works well on our channel anyway thank you so much for watching without further ado let’s get started so here’s the deal with intel intel works in the database services which similar to ibm as well they also make processors of course if you have done even just a little bit of research on intel you will know the company is massive and well known for its processors amd of course is their main competitor in this kind of field now just to be clear i do understand a little bit about the computer space so understanding the difference between intel processors and andy processors is just a no-brainer you can look at intel and intel does make better processors than andy at this point even though amd may be able to fit more transistors on its processor amd is is currently being very innovative and they’re a much cheaper alternative which is definitely going to grab some of the people like me who may be interested investing in just maybe a computer that’s not going to cost very much and then still getting pretty solid gaming performance but if you’re just looking for single core performance like you’re just web browsing or you’re just you know you’re looking maybe for editing things like that in the long term intel is just a much better processor that you would go with now intel also seems to have a better track record so i would pay a little bit extra for an intel processor now i also know the amt is still very fine too but intel has been doing this for many years although amd is doing news for mayors too but really intel has better processors than amd at this point what intel does is they make a higher they basically give you a processor with a higher single core performance and then they’ll give you maybe an i9 with 10 cores versus if you go to amd they may give you a processor with 32 cores which will be massive but the dealers will work really well in gaming but may not you’ll notice the difference just in terms of when you’re using the processor in general if you’re not using it for gaming you might notice a little bit of the difference in terms of the single core performance so definitely keep that in mind i understand that amd is still doing very well with also performing well in single core performance too but the point is that i do think that intel currently does have to leg up on them at this time also just to be clear intel does work in the graphic space too because they are making integrated graphics for their processors this is very neat as intel currently came out with a new dedicated graphics family they call it which is called the intel iris xc graphics or just the intel iris graphics in general i see intel iris xc on a lot of the newer computers at this point which is kind of a nice graphics card at least for when you’re buying this processor you don’t have a dedicated graphics card or a secondary graphics card if you build your computer on the intel iris xc platform this will give you the ability to at least have intel iris graphics which are supposedly much much faster than just regular you know integrated graphics that intel has intel currently right now has intel uhd graphics which are the integrated graphics that of course are for intel and so that could support up to 4k and things like that but the idea here is that this processor or this graphics card is going to be much better for you in the long term as it does seem to be much more powerful than the than the old series so definitely keep that in mind is intel is now trying to outpace amd ii for the fact that if you weren’t getting as great graphics from intel processors you may have a second graphics card where that would be maybe amd would offer you maybe a second graphics card at the amd radeon graphics they also have of course a graphics card from nvidia nvidia is also very popular from my perspective you really want intel cpu and video graphics card i could talk about that you know in a future video but the deal is that intel currently right now does make phenomenal processors and they also have a great graphics card to go along with that too now i understand this is integrated graphics so likely people who are interested maybe a bear graphics card will get something different but the point is that if you’re looking for a laptop that is going to be strong in performance and not going to be using as much power as maybe a video graphics card or some sort desktop graphics card that you’re going to shove into the laptop the idea is that intel iris graphics will be great for the computer as it makes the computer thin and also allows the computer to be very powerful at that thin form factor now let’s talk about the intrinsic value per share of the company we consider that the projected free cash flow model of the intrinsic value calculates the stock to be how are having a trade to dive about 68 dollars a share so 68.36 is the exact number but the point is that intel here is really a phenomenal stock for the fact that it does actually trade below intrinsic value as a lot of tech companies right now aren’t doing that so if we talk about the growth multiple here this is how you calculate this the growth multiple is essentially a projection of the growth of the earnings each year since this company grows in earnings relatively quickly and it has the potential to grow in their needs relationally quickly and adds a very high growth multiple now even if the growth multiple is lower it still although it would change statistic value the company would still i think trade relatively below the intrinsic value for the most part yeah even as you lower the growth multiple so if you weren’t as excited about the stock at this point you could lower the percentage growth each year and so that would lower the growth multiple and that would suggest that the value is less than what it is currently and you’d still be okay also you can multiply that by the free cash flow this is a six year average of that so it isn’t just taking the single yearly growth of the earnings or the single yearly earnings at this point it takes you know six years so that’s definitely helpful in terms of projecting of where the company’s going to go and basically determine that this you know it wasn’t just one year that the stock made a lot of money it’s over many years we also have the total stock with equity which is simply the assets minus the debt of the company you add that then you multiply it by 0.8 which is really just to offset the growth multiple listed here and then you divide that by the shares out staying in the market in order to get the intrinsic value per share of the company now this is very important and there’s many ways of calculating the intrinsic value but this is just one way and i certainly like to talk about this in all of our videos as it’s very important i think everyone should know how to calculate their intrinsic value especially from a value investor’s perspective so if you’re looking at apple let’s say and you see that the stock is trading way high compared to its intrinsic value that would suggest that the company is really overvalued if a company trades below the intrinsic guy that would suggest that the company is undervalued so definitely keep these things in mind when you’re investing now currently the company has a book value of 21 a share and how this is calculated is by taking the shareholder equity divided by the outstanding charities in the market so here we can see the shareholders equity has been increasing year over year they’ve also been increasing the debt year over year but this also goes back into the company and they’re trying to reinvest it and do things like that so although this company can really pay off its debt quite easily this company is still willing to increase it the idea is just to is that you have extra cash too for maybe investments and whatnot so the point is that this company does have a little bit of debt but the company’s shared equity is increasing because the assets are increasing faster than the debt is increasing so although this debt is increasing the assets are actually increasing at faster rate meaning that the shared equity will actually increase as time goes on now the point of this is the book value will increase with the shareholder equity so if the company is decreasing the house indicates the market in fact if they’re actually not decreasing the asset share in the market and they’re doing nothing with it the shallow decade is increasing that would mean that the book value should increase year over year and that is the case with intel here as even though they are they are also buyback on stock we’ll talk about that in a moment but the point is that even if they didn’t the shared equity just with that increasing the book value should increase that would increase the intrinsic value as well so that’s very important that we take a look at that in the future and also when you’re investing in a company make sure you look at the shared equity make sure that they’re managing their assets well and make sure that the book value should be generally increasing as time goes on now consider that the net income here is five billion dollars a quarter approximately at this point this company has done very well over the pandemic we have to understand that too and this company here brings in approximately 18 billion dollars every year now that’s just a net income so that accounts for depreciation that counts for taxes it counts for any worker fees or anything like that that is all taken into account within the income so that’s very important and that’s why with this 18.5 billion dollars this is really cash that the company is taking in to then be able to spend on maybe paying down their debt or maybe reinvesting it back into the company doing things like that they have spent time paying down their debt as we looked about in the past but the point is that this company here currently is just able to make plenty of money and they really have no problem doing so this company really is strong in its tech space and with amd being the primary competitor to them amd still is not outpacing intel at all in terms of earnings and also in terms of processor performance now let’s take a look at the price earnings of the company we can see that they have a price earnings of about 12 that is currently very very low for this company and especially for a tech company in this space we see that the company currently has earnings per share of about four dollars and fifty cents this company’s price although has been increasing the trading value of the company the company’s price to earnings has also been relatively steady because the earnings per share is actually increasing alongside the price so with that in mind this is actually a perfect example of a company trading at value pretty much all the time we did it with a price tag of about 12 that is very consistent with past years and this really doesn’t suggest that the companies are valued at this time so from a value investor’s perspective this is a great way of potentially entering into a pretty strong growth stock that is in the tech industry so if there’s another pandemic we have you know with the delta variant currently that could be a stock that would be at least protecting you against the potential destructive problems of the delta variant for the economy now two more things i want to talk about here are the outstanding shares of the company and then the dividend of the company we consider that this currently is showing that the outstanding chairs of the company have been decreasing year over year and approximately year over year you know the point is that the companies buy back their own stock consider that they’ve gone down from approximately six billion dollars or six billion shares of the company 6.2 billion to be more precise and now they’ve gone it down to four billion shares now this is these are the outstanding shares in the market so the point is that when the company buys back their own stock they’re decreasing the outstanding shows the market this is huge because if this helps this normally helps shareholders the idea is that when you’re buying back your own stock you are increasing the book value per share of the company then also increasing the intrinsic value per share of the company because there’s less outstanding shares in the market the point is that essentially if you have assets that are distributed across more shares they’re going to be worth less per share and if you have less shares outstanding there’s less shareholders and those assets are distributed across less people and less shares so therefore each share is worth more and therefore when someone’s buying back their own stock it definitely it should benefit the shareholders as long as the company isn’t like decreasing the the shareholder equity to buy back their own stock their buyback their own stock may be at a bad price and so that would be the only way that it wouldn’t be as effective but here from a value investor’s perspective we can see that intel does not seem to be overvalued at this time now let’s talk about the demand of the company so currently we consider that the company offers a demand as well of 2.6 percent now so essentially they’re buying back their own stock and then they’re also paying out a dividend so by buying back their own stock they’re are officially increasing the trade value a little bit because they’re also increasing the training worth that and then they’re also with the paying out dividend they’re giving you consistent debt and income so if you want to hold this in maybe a long-term portfolio or a long-term you know investment portfolio that’s going to just reinvest the dividends so maybe a dividend portfolio maybe a retirement portfolio all that kind of stuff this company would likely be pretty good for that even though it’s not a super high demand it’s not like a crazy dividend stock by any means but the point is that this company has plenty of earnings to pay out to the shareholders they really can afford this demand at this time i do understand that they should be able to increase this event year over year they really have no problem paying out this demand to you so that’s a huge plus for the company we said that they currently pay out 34.75 per share that you own per quarter as well so that is plenty of money as divine income so you can take this money reinvest it into the shares or you can just keep it as separate cash so maybe when the stock comes down you can reinvest it during that time you can count time the market a little bit i wouldn’t necessarily recommend timing the market but the idea here is that if you’re looking at from a valiant business perspective you can understand where a stock should trade towards and that’s where we like intel intel right now seems to be currently an undervalued stock i do think that the company in the long term will be able to do very well to the fact that they still outpace their competitors at this point i’m going to consistently watch this however i really really expect intel to be able to outpace amd just for the long term i do not see amd being able to outpace intel in the near future nor the long term intel also is increasing their transition that they’re putting on their their cpus as well this just took a little while for them to get this technology out but they should be able to get this technology out maybe 2022 2023 they’ve talked about this before and so if you want to look at maybe their investor conference you can also talk about that as well and look into that if you’re interested anyway thank you so much for watching if you like this video please do like and subscribe this is about a channel and please come down below and tell us what you think about this company we’ll try to get back to you anyway thank you again for watching have a great day everybody.
