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Inside Wall Street


Intel: The Chips May Not Be Down for Long

Intel's (INTC) stock zigzagged in January, drop- ping as low as 18 a share because of the chipmaker's modest first-quarter sales forecasts and downgrades by two major analysts. But the actual quarterly results were more robust than expected, and the stock had rebounded to 23.84 as of May 14. At their peak in 2000, the shares hit 75. So "at this level, Intel is selling at a bargain," figures M&R Capital Management President John Maloney, whose firm owns shares. Because Intel, the world's largest maker of microprocessors, generates 72% of its sales overseas, the economic slowdown in the U.S. isn't hurting it much. Maloney predicts that in the long term the company's sales in the U.S. will improve. The stock is at the low end of its seven-year historic trading range of 13-38, even though the company's earnings and free cash flow have been on the rise, he notes. Intel is currently trading at 14 times his 2009 earnings estimate of $1.59 a share. His 2008 forecast is $1.40. And, considering Intel dominates the microprocessor market with an 87% share, Maloney argues that a higher valuation for the stock could be justified. He predicts it will hit 30 by yearend. John Lau of investment firm Jefferies, who rates Intel a buy, says the company continues to gain market share because of its superior products, manufacturing prowess, and strong financial position.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

In Online Jewelry, Bidz.com Shines

Most retailers have reported lackluster results lately because of the weak economy, but Bidz.com (BIDZ), an online jewelry auction site, posted solid sales and earnings in the first quarter. A tiny version of giant eBay (EBAY), Bidz.com has created an "attractive auction platform that is creating an impressive track record," says Mark Argento of Craig-Hallum Capital group, who rates the stock a buy. Now trading at 11.11, the shares should hit 20 in a year, he says, based on his earnings estimate of 56 cents a share for 2008 on sales of $232.3 million, up from 50 cents in 2007 on $230.2 million. The number of new buyers, he notes, rose 43%, to 83,179, and the average price of a purchase grew 10%, to $170. Elizabeth Pierce of Roth Capital Partners, who also tags Bidz.com a buy, expects the economy to remain challenging in the second half, but she sees the company continuing to deliver strong results.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

Hunting for Oil from the Sky

If a remote exploration technique developed by Energy Exploration Technologies (ENXTF) proves to be a success, it could cut the cost and time of finding new oil fields. The Canadian company's proprietary "stress field detector" (SFD) system surveys areas from airplanes to identify underground faults and fissures, which could allow exploration companies to more accurately pinpoint prospects for seismic testing on land. Energy gets a royalty for every discovery. Michael Mork of Mork Capital Management, which owns shares, says SFD is eco-friendly and suitable for use in protected areas like the Arctic National Wildlife Refuge. Pengrowth Energy Trust (PGH) in Canada has signed two contracts to use SFD in Alberta's Pascua field, says Charles Selby, a Pengrowth vice-president who sits on Energy's board. Still, there's risk: Energy's stock is at 2.92 a share, down from 5 in late 2007.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.


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