By Investment U
Intel (Nasdaq: INTC) is lagging the S&P 500 for one-, three- and five-year returns. But recent moves by the chip giant have many analysts looking for a triple-digit gain in as little as the next three years.
Intel has an 80% market share of PC and laptop chips, and while sales for those types of chips have been falling since the advent of smartphones and tablets, the decline is expected to slow from a 7.8% drop this year to 1.2% next.
But the real pop from Intel will be the result of the massive spending it has done to not just catch the current big names in tablet and smartphone chips, but beat them soundly with the company’s new technology.
Last year, Intel spent seven times as much on chip research as No. 2 Qualcomm (Nasdaq: QCOM). And this year it is outspending the No. 1 chip foundry, Taiwan Semiconductor Manufacturing (NYSE: TSM).
The result is that Intel will have the fastest, lowest energy consumption and lowest-cost chips for tablets and smartphones of all its competitors.
This year, Intel launched its 28 nanometer Atom Chips, and next year the company will launch its 14 nm chip. Its competitors will be stuck at 28 nm. The smaller the nanometer, the faster the chip.
Ross Seymore of Deutsche Bank expects to see market share gains for Intel in tablet and smartphone chips as early as next year.
But, where the effect of all this research spending could be seen first is in the need for new servers to address the rising demand of data traffic. One server is needed for every 122 tablets in use and each server requires two chips. Intel’s server revenue alone is expected to grow by low double-digit percentages.
Intel has the resources to be the dominant player in the tablet and chip segment of the chip business, and retain its 80% control of the PC and laptop market. I wouldn’t bet against the company.
Bankers love to charge higher interest rates on loans. That, I’m sure, isn’t a surprise to anyone. And the steepening interest rate curve we have seen in the last few weeks as the 10-year Treasury popped through the 2.0% level will allow them to do just that.
The upside of the inevitable increase in the cost of borrowing is the fact that the numbers go right to the bottom line of banks… and that’s where we can make some money.
These days, banks make their money on net income margin, or the difference between what they pay to borrow money and what they charge in interest. And, there is nothing better for banks than a steepening yield curve to drive net margins higher.
Also, as Treasury yields increase, they tend to do so at a faster pace across the whole yield curve. This feeds bankers’ greatest love – borrowing short and lending long.
When you combine increasing costs to borrow and the highest consumer confidence reading in five years, it’s a screaming opportunity in banks.
Financials were up twice as much as the broad market in May and with the yield curve moving in bankers’ favor we could see more of the same for the rest of this year.
One last point – the steeper the yield curve, the more banks will lend. So we have increasing margins on what is expected to be increasing lending. That’s a one-two punch you need to be part of.
Look at financials.
Finally, definitive data on an issue I mentioned here last year about space- age foam versus coil-spring mattresses. I knew this would be at the top of your list of priorities.
As you might recall from last year’s piece, foam mattresses had been criticized by their owners as being lousy for sex. The experience was described as like being stuck in quicksand. Some foam users are even having sex less often since they bought their space-age bed.
But Leggett & Platt, a manufacturer of a hybrid foam mattress, now claims to have solved the problem.
A study funded by the same, titled “Sexy Sleep,” asked 255 participants to evaluate the performance of beds after sitting, laying, jumping, rolling, bouncing and even crawling on them. (That should cover about all of it.)
The hybrid won in all categories.
It seems 85% of mattress buyers never considered intimacy when making a mattress choice. Leggett & Platt are doing their best to change that.
So, if you’re in the market for a mattress you might take a look at the Leggett & Platt “Sexy Sleep” study before making a decision.
Thank God someone is on top of the really important issues we face today.
Article By Investment U
Original Article: Finally… A Solution to a Real Problem