Stock Trade of the Week: Intel (INTC)

Intel Corp. (Nasdaq: INTC) – Intel is one of the largest semiconductor manufacturer in the world based on sales and market cap. The company and Samsung are in a close race in both categories for the top spot. Intel is based in Santa Clara, California and was founded in 1968.

The company operates through six segments—the Client Computing Group, Data Center Group, Internet of Things Group, Non-Volatile Memory Solutions Group, Programmable Solutions Group, and All Other segments.

Intel has seen earnings grow at a rate of 17% per year for the last three years and in the latest quarter the company reported earnings growth of 44%.

Analysts are predicting earnings growth of 20% for 2018 as a whole.

The company’s profitability measures are really strong with a return on equity of 24.8%, a profit margin of 34.4%, and an operating margin of 30.9%.

The sales growth hasn’t been as strong as the earnings growth, but over the last three years the company has grown sales by 6% per year and by 15% in the latest quarter.

Intel’s weekly chart shows that the stock has found support at its 52-week moving average after a recent pullback. The company guided earnings higher on June 21, but slipped after its actual earnings report on July 26. The weekly stochastic readings and 10-week RSI are the lowest they have been since last July. The stock rallied nicely after that temporary pullback and subsequent reversal.

Suggested strategy: Buy INTC with a maximum entry price of $51. I would set a target of at least $75 over the next 12 months (for a potential return of 50%-plus from current prices). I would suggest a stop loss at the $45 level.

— Rick Pendergraft

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