A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 120,000 members have weighed in on nearly 5,400 stocks, sharing bullish and bearish opinions alike.
In the case of battered semiconductor maker Advanced Micro Devices (NYSE: AMD), a total of 3,141 members have weighed in on its chances of success. I've already plucked out some of the bullish rationale backing AMD today, so here are three counterpoints to consider, courtesy of CAPS:
Runner up: Lead processor maker Intel (Nasdaq: INTC) has about an 80% share of the world's chip market while AMD has the rest. Intel was a year ahead of AMD in using 45-nanometer chips, and it is quick to match any AMD features it lacks, such as it did with its new Core i7 chip. The i7's improved efficiency could be more attractive for companies with large data centers like Google (Nasdaq: GOOG) and Microsoft.
Consistent money loser: Although AMD had profits from continuing operations in its most recent quarter, its GAAP net loss was $67 million and it has been consistently in the red. It was its eighth consecutive quarterly loss and its quest for profits always seem to turn into losses, increasing debt, and sinking shares.
Weak tech outlook: Sun Microsystems (Nasdaq: JAVA) announced it would lay off up to 6,000, Intel lowered its fourth-quarter guidance based on lower PC demand, and Cisco (Nasdaq: CSCO) issued a similar warning. Hewlett-Packard (NYSE: HPQ) seems to be about the only tech company with good news lately. Intel's warning in particular put pressure on many throughout the computer industry including Dell (Nasdaq: DELL), which reports earnings later this month, and investors wonder if AMD will release bad news of its own.
Of course, AMD has survived despite dozens of obstacles. But the question about whether the company can continue to do so is why CAPS is such a great resource to augment your own analysis. To see what the very best CAPS members are saying now about AMD now, just click on over to Motley Fool CAPS and have a look -- it's all free, and even open to your opinion.
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