Stocks That Almost Made the Cut: March 2006

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March 1, 2006 | S.T.A.M.T.C | | Author Asif

Intel (INTC) has seen quite a drop in its share price over the last three months, loosing almost a fourth of its value. Intel was a strong contender for this month’s SINLetter based on its current valuation but I was not entirely convinced that Intel has hit bottom as yet. Apart from the fierce competition that Intel is facing from AMD, I think the bigger threat on the horizon is the revolutionary nine core Cell processor developed jointly by IBM and Sony for the Playstation 3. While Intel and AMD are dabbling with dual core processors, IBM has already made plans to introduce the Cell processor in a line of blade servers. Intel’s margins may also face pressure in the future thanks to its decision to enter the highly competitive and (often) low margin business of consumer electronics.

Another stock that I strongly considered for this month’s investment newsletter was NetScout Systems (NTCT). NetScout makes a line of network monitoring products called nGenius. I am not sure why anyone would choose this product over the network monitoring software that comes bundled with routers and switches or available for download from open source websites. Revenue growth has been good in the recent quarters but profit margins are very low. This does look like a promising company and I am going to follow up on it to see if I can get some of my questions resolved. Interestingly, a Kaufman Bros analyst initiated coverage on the stock today with a buy rating and the stock was up 4.72% in after hours trading.

Full Disclosure: I currently do not own any positions in INTC or NTCT.




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