Will 2014 Be a Transitional Year for Intel?

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Dec. 27 (Bloomberg) – EVA Dimensions Global Head of Equity Research Craig Sterling previews today's markets and discusses his investment ideas with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

An hour framework, the most important observation we can have is an incremental positive inflection.

We're saying that for baker hughes.

Companies like halliburton are far better in terms of economic performance.

Baker hughes has been the dog of the -- four years.

It is really cheap.

Value in our market is starting to matter again for the first time in a while.

Since 2011, 2000 12, and part of this year, the value did not matter.

You are saying that that is so cheap that that is where you'll get the best return?

You want to look for value.

And you want to improve on fundamentals.

They have been cheap for a while.

You need to see the shift.

When you look for a change and you look in investment capital, the balance sheet involved is small.

An improvement in sales growth does not have to be incredible, just small improvements.

To get to that inflection point.

To get the scale out of their assets.

So valuation and improving fundamentals is another description that you applied to intel.

Julie, tell us what is going on with intel.

They have had a decent year.

They are up in line with the markets.

Semiconductors have had a very good year.

In part, because of the supply and demand picture.

You see that intel is up about 25% year to date.

The semiconductor index has risen by 38%. it has actually underperformed more broadly.

They are undergoing a strategic change.

It came out last year and said that sales would be little changed in 2014. stocks dropped.

They also said they would focus more on designing chips that clients want, rather than what intel wants them to one.

They also let other chipmakers makes chips at factories.

It seems like 2014 will really be a transitional year for intel as it starts to make these changes.

Would you agree, craig?

I would.

Intel is a unique company.

They are a complete anomaly within semiconductors.

It is not just driven by supply and demand.

We have seen i get better over the last year.

They have huge secular issues.

If you think about the mega tech stocks that have had secular problems, usually it does not end well.

They cut back and try to improve what they can.

The market sees through and slows down.

For intel, they have taken an aggressive approach.

They have put a ton into r&d programs.

They have become a better

This text has been automatically generated. It may not be 100% accurate.


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