Buy or Sell: Intel (INTC) - Real Time Insight
09 Avril 2013 - 1:33PM
Zacks
Like many tech stocks to start 2013, Intel
(INTC) has been rangebound. The computer chip giant is
pretty much flat on the year, representing a slight
underperformance when compared to the broad tech (XLK) sector.
This continues the sluggish trend for INTC, as the company has
struggled over the past year, losing about 25% of its value in the
time frame. This is especially bad considering that XLK is more or
less flat in the same period, meaning that INTC has been a chronic
underperformer.
Obviously, this hasn’t always been the case for INTC, as the
firm was crushing the tech competition for a big chunk of 2011 and
2012, before it swooned last April and never looked back. Clearly,
perceptions have changed on INTC lately and some believe that there
aren’t many catalysts to rekindle the company’s prospects going
forward.
Still, INTC remains a vital part of a number of computing
devices, while its weak stock price has sent the yield up to an
impressive level. The company is actually paying out over 4% at
time of writing, so it could be considered a yield destination by
some, and especially those who are looking for income options in
the technology arena.
But what’s next for INTC? Can the company see a rebound in its
share price, or is it doomed to the realm of slow growth higher
yield firms in the tech world?
And most importantly, are you a buyer or seller of INTC at this
point in time?
Reasons to Buy:
- Combine the Forward PE (below 11) and a yield above 4% and you
have a great value in the technology world.
- Earnings estimates have been moving slightly higher for the
current quarter, suggesting analysts are growing more bullish on
the firm’s prospects.
- INTC also has a history of positive surprises; the firm has
beaten expectations for the last four quarters.
Reasons to Sell:
- Year-over-year growth is quite poor for INTC, with current
quarter and current year estimates coming in at negative double
digits.
- While the stock might be in a highly Ranked Zacks Industry, it
is just a 3 and there are plenty of other options in the space that
have better Zacks Ranks.
- INTC has long been the king of PC chips, but can they pick up
the pace (and market share) in the increasingly important
smartphone market despite being the (relative) newcomer to the
space?
Which story wins out for you; the value of this high yielder, or
worries over its future?
Let us know in the comments below!
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INTEL CORP (INTC): Free Stock Analysis Report
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