I established a position in INTC in 2012 and 2013. The market was pricing INTC like it was going "the way of the Dodo bird". The trailing PE was a very modest 10. Yes...10
Sure, they don't have the growth they once had during the heydays of ever expanding PC and laptop growth. Their revenues had stalled a little, just like they did in 2006 before regaining their mojo. Turn the clock forward to 2018 and their revenues are on the move again.
Although their LT debt has increased to the low 20 percent range, they produce a mature CF stream to reasonably support this type of leverage. In fact, with lower interest rates, it was a good time to beef up leverage. I view it as a smart move to increase their ROE. There is a time and place to make adjustments to a company's capital structure and this was definitely one of them.
INTC is approaching middle age. They still have an ability to grow and shine. They have the CF and the technical knowhow to evolve their business. Furthermore, they have done so.
Slowing down from their once robust growth is not such a bad thing. In the meantime, they have built a solid business and core strength. From this position of strength, they have begun to reinvent themselves and push forward.
Just like the Olympics, youth is not everything. Can you say Dara Torres?!
