2-Star Stocks Poised to Plunge: AMD?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip maker Advanced Micro Devices (NYS: AMD) has received a distressing two-star ranking.
With that in mind, let's take a closer look at AMD's business and see what CAPS investors are saying about the stock right now.
AMD facts
Headquarters (Founded) | Sunnyvale, Calif. (1969) |
Market Cap | $5 billion |
Industry | Semiconductors |
Trailing-12-Month Revenue | $6.6 billion |
Management | CEO Rory Reed |
Return on Capital (Average, Past 3 Years) | 33.9% |
Cash/Debt | $1.8 billion / $2 billion |
Competitors | Intel |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 17% of the 3,765 members who have rated AMD believe the stock will underperform the S&P 500 going forward.
Just last week, one of those Fools, Naxias, nicely summed up the bear case for our community:
AMD is burdened by heavy debt, its products often come through the gate late, and -- worst of all -- its main competitor is a wealthy and seasoned monster. There was a time in the 1990s that, despite a far inferior R&D, it was able to outpace [Intel], but R&D is the lifeblood in this game and it was only a matter of time that AMD sank. Will non-cpu chips and boards sustain AMD? Perhaps. But we are talking about survival and not thriving, and I'd put my money in the SP500 index any day over this chip designer.
What do you think about AMD, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Intel. Motley Fool newsletter services have recommended buying shares of Intel and NVIDIA, as well as writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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