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Intel stock price cheap? You must be joking

Equals historic high

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Intel share price equals its historic high, standing at a price/earnings ratio of 30, a tech analyst claims.

In a letter to today's Financial Times, Marshall Auerback, of David W.Tice & Associates, a Dallas-based fund adviser and manager, criticises the newspaper's Lex column for asserting that Intel trades at just over 20 times next year's earnings.

Strip out non-recurring investment gains (a whopping $3.3 billion for the first nine months of this year) and Intel's forward P/E rockets to 30, Auerback reckons.

This looks expensive, considering that the last time Intel's average annual P/E was 30 was in "1983 and from 1988 to 1996 (when the personal computer industry was booming) the average annual P/E ratio ranged from 11 to 14", he points out.

Now the PC industry is "stagnant and Intel faces a huge competitive threat from AMD".

Auerback signs off by urging Lex to do its homework. "Just because this nonsense about Intel is repeated endlessly by Wall Street analysts does not make it true." ®

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