Bellwether Intel (NASDAQ: INTC), the world's largest semiconductor manufacturer, is signaling that the global economic recovery is strengthening, which is why I'm Reiterating my Buy rating for the company, first recommended on March 30, 2009 at a price of $14.72. If you bought Intel in late March, you're up 34%.Look for Intel's FY2010 revenue to increase 10-15%, as customers re-build inventories to prepare for ramping demand for computers, and chip-laden devices, each of which thoroughly explains why institutional investors (IIs) have looked past INTC's poor FY2009 results. The First Call FY2009/FY2010 EPS estimates for INTC are 80 cents to $1.46.
Further, look for Intel to increase market share in higher-end products, on its next-generation semiconductors. A strong balance sheet, a superior distribution network, a pervasive global presence, and one of the most respected brands in the world make INTC a stock most investors should not pass up: Intel's shares should be above $30 by the end of 2010.
Technically, Intel's stock chart is beautiful – an uptrend, with minor, constructive pull-backs, and a price that continually stays above the 50-day moving average – a sign that institutional investors are adding to their IBM positions.
Stock Analysis: Intel Corporation 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 one month, 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 December 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.
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