Intel's results point to a tech, global recovery

Posted Jul 21st 2009 6:30PM by Joseph Lazzaro
Filed under: Intel (INTC), Stocks to Buy

I'm Reiterating my Buy rating for Intel Corporation (NASDAQ: INTC), first recommended on March 30, 2009 at a price of $14.72.

No longer a get-ahead-of-the-pack play, strictly speaking, Intel is now a run-with-the-pack play: the institutional investors have been adding to their INTC positions for months, and you should too, if you'd like a chance at out-sized gains.

Intel just posted good Q2 revenue of $8 billion, led by sales in Asia, and the company predicted an even stronger Q3. That keeps the emerging market recovery thesis intact for tech, and macroeconomically. What's more, sales of Intel's Atom processor, used in netbook computers that sell for as low as $200, further fills-in the improving landscape picture.

Meanwhile, Intel's balance sheet is strong, and its new market opportunities remain promising. The FY2009/FY2010 EPS estimates for INTC are 56 cents to $1.09.

Stock Analysis: Intel is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in INTC now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your INTC position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $8.50.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: computer chips, ComputerChips, intel, recession, recovery