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Analyzing Intel and Hitachi: Investment Insights and Financial Strategies

This financial analysis compares Intel Corporation and Hitachi Corporation, examining their company overviews, product offerings, recent developments, and future plans. Intel, a leader in microprocessor manufacturing, has shifted its focus to server-related technologies with several acquisitions aimed at expanding its market reach. Meanwhile, Hitachi, with a rich history in electronics, is diversifying its portfolio amid sales challenges. The analysis applies a seven-point financial criterion to assess growth and risk, providing investment recommendations for potential investors.

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Analyzing Intel and Hitachi: Investment Insights and Financial Strategies

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Presentation Transcript

  1. A Financial Analysis Which Stock to Decide on? - Samarth Patwardhan - Sachin Mylavarapu

  2. Agenda • Company Overview • Products and Services • Recent Developments • Financial Analysis • Future Plans • Conclusion

  3. Company Overview Intel Corporation • Incorporated as NM Electronics on July18th 1968 • Introduced first ever Microprocessor in 1971 • Went public on October 13th 1971 • Sector – Technology, Industry – Semiconductor broad line(b = 2.1) • Today – World leader in the manufacturing of microprocessors

  4. CompanyOverview Hitachi Corporation • 1910 – Started as an Electrical Workshop • IPO – 1949 – Tokyo Stock Exchange, April’1982 – New York Stock Exchange • Sector – Consumer Goods, Industry – Electronic Equipment (b = 1.04) • Today, Hitachi has a broad range of products to offer in the market

  5. Products and Services Intel Corporation • Classified in four main categories • Wide range of products • From wireless networking solutions to programmable hardware • Focus – Freedom of computing and reduction of infrastructure costs

  6. Products and Services Hitachi Corporation • Much more diversified spectrum • Power and Industrial Systems, logistics services • Information and telecommunication systems, electronic devices • Media products, financial services • Focus - Creating e-business infrastructures that are tailored to specific individual needs

  7. Recent Developments Intel corporation • In the last 2 years, seven acquisitions to broaden its product portfolio • Target the network and Communications markets • Shifted more than half of their R&D expenditure to server-related chipsets, microprocessors and platforms

  8. Recent Developments Hitachi Corporation • First half of Fiscal’ 01 – 2% drop in Sales • Hit by a 90% price collapse for DRAM chips • October’01 – decision to spin off two if its groups • Recent reform measures include alliances, JV’s, acquisitions etc.

  9. Financial Analysis The 7 – Point Criteria • Growth • Liquidity • Gain • Market Value • Risk Factors • Future • Stock Performance

  10. Overview • Excess Inventory • More Accounts receivable

  11. Overview • Mode of Financing

  12. Growth

  13. Growth

  14. Liquidity

  15. Gain Asset Utilization

  16. Gain Use of leverage Hitachi – Uses Debt Intel – Less use of Debt

  17. Gain Profit Margin • Cost of sales. • Money tied up in A/R and inventory

  18. Gain The Bottom Line

  19. Gain

  20. Market Value Price/Earnings

  21. Future Plans Intel corporation • Market share for processors – increase from 20% to 69% by ‘03 • Fiber optics industry • Hyper-Threading technology • CEO – “In the future, all computers will communicate and all communication devices will compute.”

  22. Future Plans Hitachi Corporation • April’2001 - The Corporate Innovation Innovative (CII) • Reduce material purchasing costs by 20% • Inventory and A/R by 25% • Aim at doubling the sales from Fiscal 2000 to Fiscal 2002

  23. StockPerformance 3 – Month Performance

  24. StockPerformance Semester Start – 4th May, 1600 hrs

  25. StockPerformance 1 – Year Performance

  26. StockPerformance 5 – Year Performance

  27. Summary

  28. What to Do? • Look beyond numbers • See as an opportunity to buy low • If you already have it, hold it • Good for long term investment

  29. Risk is the Name of the Game! Are You Willing to Take it?

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