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Don't Overreact to Intel's Earnings Results

What this tells me is that as downtrodden as Intel may appear, management has figured out ways to bring back operational efficiency means that the company is still in capable hands. Not to mention, the company has laid down the foundation for its long term-success, which includes (among other things) perusing growth in China and emerging markets, and reinvesting cash flow back into research and development.

In that regard, I'm willing to give management the time it needs to make the necessary adjustments to grow market share in that all-important mobile category. I know this is where things get sketchy.

I'm not suggesting that Intel is suddenly going to overtake Qualcomm and Broadcom (BRCM), but I believe Intel has the ability to emerge as a legitimate player not only in mobile devices but also baseband chips.

That Samsung has chosen Intel's Clover Trail+ mobile chip processor to power its Galaxy Tab is a small step. But it's one that can turn into a giant leap. This also demonstrates that Intel is, in fact, able to optimize Google's (GOOG) Android platform, which some people in the media have argued Intel couldn't do.

So as I've said on more than one occasion, taking a position here on Intel should be about what you believe the company is able to do the future. Judging Intel solely on a quarter to quarter basis doesn't work.

Given management's plans to grow the company's chip business in the emerging markets, shares of Intel can command a long-term fair market value of $32 per share on the basis of improved margin and free cash flow.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense.

His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio.

His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

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