Intel (INTC) has built, over the years, a solid franchise in microprocessors (“IntelInside”) for PCs and has continued to enhance it through its technological and manufacturing leadership. Less obvious to many is Intel’s dominance in and profitability generated from the server market, where data center growth has been driven by demand for cloud infrastructure build outs. While Intel has struggled to capture share in the faster growing mobile markets versus the likes of Qualcomm, Apple, Samsung and others who utilize cheaper, lower power ARM-based designs (licensed from ARM Holdings plc, a British company), we believe there is substantial value in its core business. Over the longer term, there are a number of opportunities for growth: e.g., should an upgrade cycle be driven by Windows 8, should ultrabooks and/or other tablet hybrid computers takeoff, shouldPC growth in emerging markets accelerate. In the meantime, the stock pays a roughly 4.24% dividend; the Fund was able to acquire shares at around 4.6 times EBITDA and 10 times earnings.
From Third Avenue Management's first quarter 2013 commentary.