From Dan Ferris in Extreme Value:
On Friday, Intel reported its results for the fourth quarter and full year of 2010, and gave its forecast for 2011.
Last year was Intel's most profitable year ever, and last quarter was its most profitable quarter ever. Intel achieved record sales of $43.6 billion, mostly due to strong sales in the server market and higher selling prices for microprocessors. Intel plans to spend 11% more on research and development in 2011. That should fuel further growth and help it maintain its 80% share of the global microprocessor market. If you believe more and more devices and appliances will have more and more microprocessors in them, you have to believe the lion's share of the profit will go to Intel.
Last quarter, Intel achieved record quarterly revenue of $11.5 billion. It's forecasting between $11.1 billion and $11.9 billion of revenue for the first quarter of 2011, so there's a chance we could see a new record.
Intel ended the year with $21.5 billion of cash and investments on the balance sheet, about $750 million more than at the end of last quarter and about $5 billion more than the end of last year. It's not only more profitable than ever... Its financial condition is stronger than ever, too.
As of Friday's close, Intel shares traded at an enterprise value of just over six times 2010 operating earnings of $15.9 billion. That's dirt cheap. Intel is worth between 50% and 100% more than that.
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More from Dan Ferris:
Why you should own the No. 1 natural gas producer in the U.S.
"This could be the safest, cheapest stock in the world right now..."
Dan Ferris: This could be the best chance you'll ever get to buy these stocks
