AMD: Strong Fundamentals Are Fully Priced In (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Advanced Micro Devices' data center product adoption is driving strong growth and margin expansion. This is likely to continue with the acquisition of ZT Systems.
• Data on guidance surprises vs consensus and normalized EPS estimate revisions suggests that the stock's growth prospects are fully priced in.
• Valuations are also near fair value levels, both relative to AMD's historical valuation multiples band and its sectoral peers.
• Relative technicals too suggest a pause to the uptrend as the stock is starting to range at a key 12-monthly resistance vs the S&P 500.
• A look at the net working capital intensity reveals that the EBIT margin growth over the past year is purely optical as the operating cash flow margins have been stable.

Read the full article here.