INTC- -27% in 11 trading days!
Posted by Jack Haddad on January 16, 2008 at 2:28 pm
The move in Intel (INTC) is overdone. The stock is now down 25% in the first 11 trading days of 2008 on huge volume:
Take a step back and think about what they said yesterday. They fell short of expectations - but they still made a lot of money: $2.3 billion in fact. Today is the 3rd highest volume day in the last 5 years (Jan 18, 2006; July 14, 2004)
These charts and moves say “Panic”. Selling volume has been big since the start of the year. Shares are now about 17-18% below their 200 day moving average. Everybody is selling and very few are stepping in to buy.But there is value there. When you back out the $2.40 per share in net cash on Intel’s balance sheet it is trading for about 15 times its last 4 quarters’ income.
This is the premiere semiconductor company in the world. Semiconductors are crucial components for computers and all sorts of electronics. Step in now and hold when nobody else wants to and when some good news surfaces and the panic subsides, buyers will return and you can sell it to them then. Furthermore, the company is no longer facing a price pressures from rival AMD. Therefore, gross margins will continue to go up.
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