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Intel Is the Stock for the Intelligent Investor: Opinion

Be that as it may, the company does not appear bothered by the obvious lack of respect. To that end, Intel has been reinvesting heavily in its business as well as in R&D core capabilities such as security as well as extending its process technology leadership. The latter initiative is one of the areas into which intelligent investors should start looking in order to fully appreciate the company's prospects, not only for the rest of this year but also well into the future.

From my calculations, these initiatives will undoubtedly place Intel at a significant advantage to the extent it will be able to leverage its current core of products and services beyond what its traditional areas into consumers can only imagine. What's more, it has not ceded victory to anyone in terms of the mobile devices market.

In its drive to compete, Intel is in the process of launching its own phone and tablet chips. Not only that, but it is also anticipating much success in the launch of Hewlett-Packard's (HPQ) new line of PCs called the Ultra Books -- aimed to steal some market share out of Apple's popular MacBook line which will be based on Intel's Ivy Bridge chips -- considered to be one of the most powerful it has ever produced.

As much as there is cause for optimism with Intel, the company's recovery will be no cakewalk. Qualcomm, ARM, Nvidia (NVDA) and even a name such as Broadcom (BRCM), which recently reported stellar earnings, are going to make certain that Intel understands the 1990s are over.

What is not over is Intel's stellar management team, one that has made it abundantly clear that the company intends on maintaining its dominance among the chips.

To that end, Intel has begun to lay down the foundation for its long-term success. That, along with stellar track record in terms of R&D, exceptional cash flow as well as top of the line manufacturing capabilities, should suggest to intelligent investors looking for value at a considerable discount that Intel should be on a short list of considerations.

With a price-earnings ratio of 11 and trading at $26, there is yet considerable upside potential by at least 15% towards my fair market value of $30.

At the time of publication, the author held was long AAPL and no position in any of the other stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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