Intel Corporation (NASDAQ:INTC) — This designer and manufacturer of digital technology platforms was last reviewed by me on Nov. 16 when I recommended it as a buy “under $35” with a trading target at $40. Despite several successful trades during the year, the highest price since the last review occurred on Jan. 27 at $38.45, where it “double-topped” with the Oct. 5 high at $38.31.
However, with the offer to purchase Mobileye NV (NYSE:MBLY) at $63.54 per share and INTC’s decline to the mid-$30s, INTC’s high number of stock holders makes it attractive for another review.
Despite “periods of lumpiness,” higher cloud investments, growth within “the Internet of Things” and increased demand for more powerful memory chips should benefit Intel. The company’s recent agreement to purchase MBLY, a leader in the research and development of advanced driver assistance systems, should help Intel cut prices while offering superior autonomous driving platforms.
Standard & Poor’s anticipates that Intel’s cash flow will accelerate, which will enable it to raise its dividend and repurchase shares. The target for INTC is $41 and is based on a multiple of 13.9X 2018 EPS estimate of $2.94, up from EPS of $2.80 est. for 2017. INTC’s current dividend is $1.04, providing an annualized dividend yield of 2.95%.
For the last year, INTC’s stock has advanced along a bullish support line. In November 2016 that line began to run coincident with the stock’s 200-day moving average. As noted above, the stock “double-topped” at about $38 in January and fell below the support line last week.
However, on Wednesday it reversed up, with a CBR buy signal from my internal proprietary indicator. However, in order to confirm the reversal, it must regain the 200-day moving average now at $35.41. Thus, buy INTC at about $35 with a trading target of $41. A stop-loss order should be placed under the “CBR Buy” at $34.60.
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