Am I missing something here? The world desperately needs microprocessors, and Intel (NASDAQ:INTC) is the most famous chip supplier. This sounds like a perfect storm for massive profits, yet INTC stock just keeps going down.
Averaging down when a stock declines can be a disastrous strategy if you’re invested in an obscure, small-market-capitalization company. But we’re talking about Intel here, for goodness’ sake.
The company’s most recently released quarterly financial data looks terrific, all around. Besides, Intel just revealed a product family that could innovate/renovate/decimate the industry.
So, let’s hunker down as I double down on my favorite tech-market loser of 2021. As long as Intel keeps making those chips, you’re welcome to keep buying those dips.
A Closer Look at INTC Stock
Seriously, INTC stock has everything that a sensible investor could possibly ask for. The stock’s 52-week range is $45.24 to $68.49. At the beginning of December, it was trading near the bottom of that range, at $49.50 per share.
Furthermore, Intel has a trailing-12-month price-to-earnings ratio of 9.64. If you’re a dyed-in-the-wool contrarian, then you should be salivating right about now. How many mega-capitalization tech names have P/E ratios below 10 nowadays?
Plus, Intel serves up a generous forward annual dividend yield of 2.81%. You’d expect to see a yield like that from an energy or utilities company, but not a tech business in 2021.
Finally, let’s observe that INTC stock has a five-year monthly beta of 0.51. This is an indicator of very low volatility, so you can hoard Intel shares in your portfolio and sleep soundly at night.
Really, what more could any informed investor want than that?
The Proof’s in the Numbers
If Wall Street doesn’t love Intel right now, that’s fine. The investors have plenty of data-ammo in their armory. Checking in on Intel’s third-quarter 2021 report, it’s evident that the company is firing on all fiscal cylinders.
For one thing, Intel reported a 5% year-over-year increase in both GAAP revenue ($19.2 billion) and non-GAAP revenue ($18.1 billion).
Next, the company’s third-quarter earnings per share of $1.67 exceeded the year-earlier quarter’s $1.02 by a hefty 64%.
And by the way, Intel’s tremendous quarter wasn’t solely driven by microchip sales. As it turned out, the company achieved all-time record revenue in Intel’s internet of things group (IOTG) segment. To quantify this, Intel generated a cool $1 billion in its IOTG segment, up 54% year-over-year.
Additionally, the company took in $326 million worth of revenues with Intel’s Mobileye segment, representing a 39% year-over-year improvement.
Of course, Intel wouldn’t be able to sustain that pace of revenue growth if the company didn’t continually advance novel tech products.
To that end, the company just released its 12th Gen Intel Core processor family. This includes the launch of six new unlocked desktop processors. Among those are what Intel calls the “world’s best gaming processor”: the 12th Gen Intel Core i9-12900K.
For all of you gaming geeks out there, you’ll be glad to know that this gaming processor features a max turbo boost of up to 5.2 gigahertz and as many as 16 cores and 24 threads.
Also new and exciting is the Intel Thread Director. This, according to Intel, “enables the two new core microarchitectures to work seamlessly together by guiding the operating system (OS) to place the right thread on the right core at the right time.”
The idea here is to optimize performance and compatibility between operating systems, in case you had trouble “processing” (sorry, another pun) all of that lingo.
The Bottom Line
What we’re looking at here are awesome new products and strong revenue growth across multiple segments. That’s what Intel offers to its stakeholders. Moreover, there’s a sweet dividend yield and an absurdly low P/E ratio.
So, don’t hesitate to take advantage of Wall Street’s irrationality. When investors come back to their senses — or should I say, when the chips are down — a long position in Intel will go a long way.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.