Intel Stock Rated A Buy By TD

Intel Stock has certainly taken it on the chin. Down over 34% from its high of $29.27, TD Securities analysts have joined the growing number of analysts rating Intel Stock a strong buy.  Analysts indicate that the rise of cloud computing means consumers and businesses are storing more data remotely which means more servers, an area that Intel dominates. Intel has a manufacturing edge when designing and manufacturing chips. Presently Intel makes the most powerful processors at a lower price per chip with good markups.

Intel Stock and Its Competitors

But analysts also comment that Intel largely missed the mobile market and is now playing catch-up. Rivals Qualcomm and ARM Holdings have seen their market values increase as they remain threats to Intel’s existing business. Revenue growth is slowing at Intel which is reflected in Intel Stock as more consumers are spending on devices without Intel inside. Intel’s latest hope, tablets running Microsoft Windows 8 devices are not being picked up at a rate that could impact present revenue growth. However analysts also point out that Microsoft has a history of slow starts and this bodes well for Intel and Intel Stock longer-term.

Intel Stock and CES Show

At the recent CES show, Intel showcased 3rd generation Intel Core processor-powered Ultrabook devices and tablets along with several phones and tablets all powered by their latest Atom processors.

Analysts believe Intel is good value at the present levels of $19.50 and with a history of dividend growth, strong manufacturing base, dominant position in the semi-conductor industry, Intel management should be able to turn the company to meet future demands in the mobile and server industries. There was little mention in their report of the PC market and whether they anticipate further declines.

Intel Stock and Latest Goldman Downgrade

Analysts commented that the Goldman downgrade last week of Intel Stock was more a case of  “closing the barn door after the horse has already fled.” The announcement was far too late to benefit investors and is more indicative of the brokerage missing the call when many major analysts had already warned of slowing sales and a lower Intel stock price.

Intel Stock Strategy

My strategy for Intel Stock has not changed. I am still Put Selling on weakness and working my valuation of the stock lower through rolling out and reducing the number of contracts being sold on the rollouts.

Recently on weakness I was Put Selling the January 2015 $15 put strike. The January 2015 $18 put strike was trading for $3.25 or 18% which is an excellent return for anyone bullish on the future growth of Intel Stock.

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  • cc

    Great article.
    The 18% on the 2015 puts is not annualized, so the returns are actually much less. Is that correct?

  • Yes, it would be slightly under 9% a year. But not a bad return while waiting for the stock to recover if you are long-term bullish on Intel Stock and no need to hold it until it expires. You can always buy it back if the stock moves higher by late next year. It will be worth a lot less if that happens and could therefore return more than 9%.