Signage with logo at the Silicon Valley headquarters of computer hardware manufacturer Intel, Santa Clara, California, August 17, 2017. (Photo via Smith Collection/Gado/Getty Images).
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Intel (INTC) stock has risen by 10.8% in 5 trading days. Do you already possess the stock? You might want to think about securing some profit as there is risk regarding growth, profitability and resilience during downturns. Reflect on the following information:
- Size: Intel has a valuation of $162 Bil and generated $53 Bil in revenue, currently trading at $37.17.
- Fundamentals: The revenue growth over the last 12 months is -3.7% with an operating margin of -8.3%.
- Liquidity: The company possesses a Debt to Equity ratio of 0.31 and a Cash to Assets ratio of 0.11.
- Valuation: Intel shares are presently trading at a P/E multiple of -7.9 and a P/EBIT multiple of -15.0.
- Historically, it has returned a median of -0.2% within a year following significant declines since 2010. Refer to INTC Dip Buy Analysis.
Although we prefer to capitalize on momentum if the fundamentals appear solid – in the case of INTC, see Buy or Sell INTC Stock – we remain cautious of potential bull traps. Specifically, it’s worth considering if the situation deteriorates significantly, and INTC declines by 20-30% to $26 levels, will we be able to retain the stock? What’s the worst-case scenario? We refer to this as resilience during downturns. It seems that the stock has performed poorer than the S&P 500 index during various economic downturns. We evaluate this by examining (a) the extent of the stock’s decline and (b) the speed of its recovery.
This might come across as a warning, but there is always a considerable risk involved in depending on a single stock. On the other hand, there is immense value in a broader diversified strategy that we adopt with Trefis High Quality Portfolio. Trefis collaborates with Empirical Asset Management – a Boston area wealth management firm – whose allocation strategies yielded positive results during the 2008-09 period when the S&P 500 dropped more than 40%. Empirical has included the Trefis HQ Portfolio in this allocation framework to deliver clients enhanced returns with reduced risk compared to the benchmark index; it offers a smoother journey, as highlighted in HQ Portfolio performance statistics.
Below are the specifics on how Intel has done during market crashes, but before that, for a quick overview: Intel engages in the design, manufacturing, and sale of computer products and technologies, with advancements in AI-driven drug searches through a strategic partnership with MILA.
2022 Inflation Shock
- INTC stock witnessed a decline of 63.3% from a peak of $68.26 on 9 April 2021 to $25.04 on 11 October 2022 versus a peak-to-trough drop of 25.4% for the S&P 500.
- The stock has yet to return to its pre-Crisis peak.
- The highest the stock has reached since then is $50.76 on 27 December 2023, and it is currently trading at $37.17.
2022 Inflation Shock
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2020 Covid Pandemic
- INTC stock dropped 34.8% from a peak of $68.47 on 24 January 2020 to $44.61 on 16 March 2020 compared to a peak-to-trough decline of 33.9% for the S&P 500.
- The stock has not yet returned to its pre-Crisis high.
2020 Covid Pandemic
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2018 Correction
- INTC stock decreased 26.1% from a peak of $58.82 on 22 April 2019 to $43.46 on 3 June 2019 compared to a peak-to-trough decline of 19.8% for the S&P 500.
- Despite this, the stock fully recovered to its pre-Crisis peak by 26 November 2019.
2018 Correction
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2008 Global Financial Crisis
- INTC stock dropped 56.8% from a peak of $27.98 on 6 December 2007 to $12.08 on 23 February 2009 versus a peak-to-trough drop of 56.8% for the S&P 500.
- Nonetheless, the stock achieved full recovery to its pre-Crisis peak by 26 March 2012.
2008 Financial Crisis
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Concerned that INTC may decline further? You might want to examine the Trefis High Quality (HQ) Portfolio, featuring a selection of 30 stocks known for consistently outperforming its benchmark that includes the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is this so? As a collective, HQ Portfolio stocks have offered superior returns with diminished risk compared to the benchmark index; it offers a smoother journey, as demonstrated in HQ Portfolio performance statistics.