Is Advanced Micro Devices, Inc. (AMD) a Good Investment?

Page 1 of 2

Advanced Micro Devices, Inc. (NYSE:AMD) is the world’s second largest producer of microprocessors, behind the tech giant Intel Corporation (NASDAQ:INTC). Intel is Advanced’s strongest competitor with more robust technological prowess and clout, so to speak. Intel also has a better-positioned balance sheet and has generally been more profitable in recent years. Billionaire Ken Griffin – founder of Citadel Investment Group – does happen to be one of Advanced Micro’s top name investors. Interestingly, Griffin upped his stake by nearly 200% last quarter (see Ken Griffin’s newest picks).

Ken Griffin CITADEL INVESTMENT GROUP

Getting into the details, Advanced’s 3Q results missed estimates on the back of continued economic weakness in the microprocessor space. Also pushing Advanced down is a worse-than-expected forward guidance that includes weakness on the consumer side. The company recently wrote down $100 million in inventory, whereas Intel is being held up with its enterprise segment. Advanced is also the only one of the five semiconductor stocks mentioned here that does not currently pay a dividend.

Advanced has had success in mobile, though, and its current product lineup suggests the chipmaker will continue in that direction. Obviously, one big issue will be continued competition in this segment. Intel has been less successful in the mobile market, but has been developing its Ultrabook portfolio.

Intel has a leading position in the high-end marketplace, and appears to be rather cheap at a 0.8 PEG. Research firm JPR estimates that Intel owns 60% of the GPU (global processing unit) market share, while Advanced holds 21% and Nvidia comes in third with 18.5%. Advanced trades with an EBITDA of 9%, which is the lowest of the five stocks, and the company has the highest debt ratio at 40%. Intel, inversely, sports a very attractive EBITDA margin of 43% and has a very attractive debt ratio of 10%.

How do other competitors stack up?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!