Will Intel (INTC) Stock be Helped by Possible Renewal of Altera Buyout Discussions?

NEW YORK (TheStreet) -- Intel Corp. (INTC) and Altera Corp. (ALTR) are said to have resumed discussions regarding an Intel buyout of the semiconductor company, the New York Post reports.

Intel is said to be looking to diversify as its mainstay business is trying to cope with a lack of demand for its personal computers.

Shares of Intel are up by 0.09% to $33.02 at the start of trading on Monday morning.

Earlier discussions between the two Silicon Valley chip makers had come apart in April, with Altera reportedly turning down Intel's offer of $54 per share.

However, sources speaking with the Post seem to believe that a transaction is more likely this time around.

"You should not be surprised if a deal comes together quickly," a source said.

Shares of Altera have spiked on the Post report, and are higher by 5.37% to $46.81 this morning.

Separately, TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTEL CORP (INTC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • INTC's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • INTC's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTEL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.21% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • You can view the full analysis from the report here: INTC Ratings Report

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