Stop Worrying Over Intel Corporation (INTC)!

Traits of a leader

At around 62%, Intel’s gross profit margins are near the top of its historical range. Last year, its net profit was around 21% – also near the top of its historical range. That’s a sign that Intel has a great competitive advantage. In addition, the company finished 2012 with more than $18 billion in cash and investments and around $13 billion in debt. It could pay off all its debts and still have billions left over. That makes it one of the safest stocks in the world. AMD, in contrast, is losing money so there are no margins to talk about. And it’s also burning through its cash. On average, AMD is burning through roughly $200 million each and every quarter. Texas’ gross margins are a respectable 50%, but that’s still a far cry from Intel’s 62%. But Texas has only added $420 million to its cash flow in 2012, versus $3.4 billion for Intel.

My Foolish conclusion

My best advice to you is to ignore the media hype on Intel Corporation (NASDAQ:INTC). This company is the indisputable leader of the cheap industry. It has the best gross margins, the strongest cash flow, and the most cutting edge technology at its side. I recommend buying Intel on dips.

The article Stop Worrying Over Intel! originally appeared on Fool.com and is written by Shmulik Karpf.

Shmulik Karpf has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Shmulik is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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