Which Chip Stock Would You Buy To Replace Intel ?

[ownyourfuture]

I owned Intel back in the glory days. I'll say 1993 to 1999.
Made a lot of money & then sold it.

Bought back 3 or 4 years ago, thinking that the movement to the cloud could bring back to the glory days. It didn't work out that way. Another reason is the movement away from desktop computing, to smart phones & tablets.

It's time to move on.
I've narrowed it down to 2.

NVIDIA Corporation (NVDA)
Yield 0.36%
Annual Amount $0.56 Paid Quarterly
Payout Ratio 18.2%
EPS $3.08
Dividend Growth 4 yrs


Microchip Technology (MCHP)
Yield 1.84%
Annual Amount $1.45 Paid Quarterly
Payout Ratio 31.3%
EPS $4.62
Dividend Growth 15 yrs

NVDA is the high flier. Seemingly everyone in the world is in love with it right now, including Jim Cramer

MCHP just keep chugging along. Not sexy, but not hard on the eyes either.

Just because it fits my style of investing better, I'm leaning towards MCHP.

[FiveDriver]

Do you follow AMD at all ?? They've had a pretty nice runup over the last 12 months.

The usual caveat about past performance, future results.

[Fedup]

I've been buying and selling AMD for my HSA. So far it has been up nearly 18% for less than 6 months for that account. I've made multiple trips already. This is the account that I barely eeked out 1% for the last few years.
But I have NVDIA in my mutual funds that I own. So I won't buy them directly.

[NW-Bound]

Quote:

Originally Posted by Fedup I've been buying and selling AMD for my HSA. So far it has been up nearly 18% for less than 6 months for that account. I've made multiple trips already. This is the account that I barely eeked out 1% for the last few years...

How is the gain compared to what you would have if you bought and held till now?

I often looked back at my trades, and saw that I would make more if instead of doing month trade, I would try to time the business cycle and do a trade every 2 or 3 years. I never do day trade, or week trade.

I do sell out-of-the-money covered calls a couple of months out, and set the price high enough so they often expire worthless, and the premiums give me a bit more money. Like dividends if you will.

Back on semi stocks, I used to have a lot of them, but mostly do ETF now, again trying to time the cyclical trend of the sector rather than invididual stocks. That said, I still have a bit of MCHP, and never had nor followed NVDA.

I did not answer the poll, as my choice would be "not applicable" or "neither".

[Fedup]

Quote:

Originally Posted by NW-Bound How is the gain compared to what you would have if you bought and held till now? I often looked back at my trades, and saw that I would make more if instead of doing month trade, I would try to time the business cycle and do a trade every 2 or 3 years. I never do day trade, or week trade. I do sell out-of-the-money covered calls a couple of months out, and set the price high enough so they often expire worthless, and the premiums give me a bit more money. Like dividends if you will. Back on semi stocks, I used to have a lot of them, but mostly do ETF now, again trying to time the cyclical trend of the sector rather than invididual stocks. That said, I still have a bit of MCHP, and never had nor followed NVDA. I did not answer the poll, as my choice would be "not applicable" or "neither".

You made me look at my bank statement. Buy and hold would net me 2% YTD. Trading net me 17% YTD.
Note that I made mistakes in this account, a few, but the minute I realized it was a wrong trade, I closed it. Also I had to sell it before I went on my vacation because I don't remember the username and password on this account. In other words, I sold much sooner, but I know this stock bounces up and down I didn't want to take any chances. Right now I'm sitting in cash. Waiting for another opportunity to buy. If there is no opportunity, I'm happy with my 17% gain.

I also didn't do the poll either. I like AMAT too.

[NW-Bound]

Ah, seeing that you mentioned AMAT, I realized I was lying about having only MCHP outside of semi ETF's.

Yes, I also have AMAT, MU, and TSM besides MCHP. Too many accounts, and I need the Quicken screen to see them all.

They have all done well so far, as reflected in the sectored semi ETFs that I have more money in: XSD, SMH. But the star of the whole portfolio is KEM, not really a chip maker but a passive component maker.

Why am I not rich holding these winners? Well, I have 30% cash, and worse, stinkers like energy, industrial metals, and mining.

PS. Forgot I also have KLAC.

[NW-Bound]

What I have found over more than 20 years of active investing is that when you buy in the right sector, you either make obscene money or good money. And when you buy in the wrong sector, the best you can do is hoping to break even.

So why am I still buying individual stocks instead of sectored ETFs? Old habits die hard, damn it.

[jonat]

Do keep in mind that INTC provides a rather high dividend for the sector. I am sitting on a bunch of it right now, but will probably sell it off over the next year or two.

[ownyourfuture]

Looks like I'm going against the poll, which has NVDA leading MCHP 3-2
Sold INTC today & put in a buy order for MCHP @ $77.01

Thanks for the replies & the alternatives like AMD, AMAT, etc.

What sold me on MCHP was the 1.79% yield, low payout ratio of 31.30% & 15 consecutive years of dividend hikes.

[conversationalphrase]

I like TSMC. I researched semiconductor stocks earlier this year and TSMC looked the best to me at the time. So far it has done well.

[kcowan]

Quote:

Originally Posted by NW-Bound So why am I still buying individual stocks instead of sectored ETFs? Old habits die hard, damn it.

Maybe because those ETFs contain some choices you do not like?

[NW-Bound]

Quote:

Originally Posted by kcowan Maybe because those ETFs contain some choices you do not like?

There's that. But most of the time, I buy individual stocks because they are more volatile than a sector ETF, and I thought I would make more money doing market timing with individual stocks. However, the winning and losing trades may average out the same as if I buy ETFs anyway.

An example: I am still in the red on GILD, but have made good money with biotech ETFs when the entire group was on sale.

[ownyourfuture]

Quote:

Originally Posted by NW-Bound There's that. But most of the time, I buy individual stocks because they are more volatile than a sector ETF, and I thought I would make more money doing market timing with individual stocks. However, the winning and losing trades may average out the same as if I buy ETFs anyway. I am still in the red on GILD

Me too.

[YVRRocketSurgery]

There was an article on Nvidia in the July 13th edition of the Globe and Mail. It's online too but behind a paywall.

Some key points from the article:

• Since 2014, Nvidia has way outpaced the FANG stocks in share price growth, tripling in the last year alone.
• As such, valuation levels are pretty expensive. Trailing P/E is 52.5 while forward is 45.4. However, earnings growth has been amazing.
• While Nvidia is best known for its GPU's for graphic cards for use for gaming, their GPU's are being using in other hot areas of tech like autonomous vehicles, data centres/cloud computing, analytics, robotics, AI, health care, and virtualization.

In a nutshell, Nvidia's GPU's and products are in demand for future technology. The share price represents that. However, it current valuation make it a somewhat risky proposition.

[ownyourfuture]

Quote:

Originally Posted by YVRRocketSurgery There was an article on Nvidia in the July 13th edition of the Globe and Mail. It's online too but behind a paywall. Some key points from the article: Since 2014, Nvidia has way outpaced the FANG stocks in share price growth, tripling in the last year alone. As such, valuation levels are pretty expensive. Trailing P/E is 52.5 while forward is 45.4. However, earnings growth has been amazing. While Nvidia is best known for its GPU's for graphic cards for use for gaming, their GPU's are being using in other hot areas of tech like autonomous vehicles, data centres/cloud computing, analytics, robotics, AI, health care, and virtualization. In a nutshell, Nvidia's GPU's and products are in demand for future technology. The share price represents that. However, it current valuation make it a somewhat risky proposition.

Thanks for posting. NVDA is definitely hitting on all cylinders.
At one point in the 90's, similar things were being said about Intel.

So I decided to go with MCHP....well maybe.
I'm hoping for a pullback. Have a buy order @ $77.01

[RobLJ]

Quote:

Originally Posted by jonat Do keep in mind that INTC provides a rather high dividend for the sector. I am sitting on a bunch of it right now, but will probably sell it off over the next year or two.

I'm up 70% over 4 years with INTC--I'll take it. I took profits and sold half the position about a year ago.
I keep looking at Qualcomm after it bought that chip manufacturer specializing in chips for cars, but the Apple royalty dispute keeps scaring me off. If Apple switched completely to intel radio chips, there would go a huge part of Qualcomm's revenues.