With shares of Intel (NASDAQ:INTC) trading at around $21.17, is INTC an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Intel is down over 6 percent so far today, which relates to recently released poor results. FY 2012 revenue came in at $53.3 billion. Net income came in at $11.00 billion. In Q4, sales dropped 3 percent and profits dropped 27 percent on a YoY basis. Revenue dropped 6 percent, which was mostly attributed to a weak PC market and weak macroeconomic conditions. To make matters worse, Intel expects a 6 percent decline in revenue for the current quarter.

Looking ahead, Intel has a lot in the pipeline, including Haswell and nanometer version of Atom. There might be potential in these areas, as well as with Ultrabooks, but considering Intel’s PC client group is responsible for more than half of Intel’s sales, this company is facing an uphill battle.

The good news is that Intel has strong margins, operating cash flow over $19 billion, and a nice yield of 4.10 percent. Let’s take a look at some more important numbers.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio and balance sheet for Intel are both strong. This is important as it allows the company to innovate more freely, which can then lead to upside surprises in regards to growth. Intel has a much stronger debt-to-equity ratio than arch-rival Advanced Micro Devices (NYSE:AMD).


T = Technicals on the Stock Chart Are Weak

Intel has seemingly gone nowhere for many years. The dividend payments have helped ease the lack of progress. While Texas Instruments (NYSE:TXN) has outperformed Intel over the past three years, Intel has once again dominated its true rival over that same time frame.



At $21.17, Intel is trading above its 50-day SMA, and below its 100-day and 200-day SMA. 

50-Day SMA


100-Day SMA


200-Day SMA



E = Earnings and Revenue Had Been Steady

Prior to 2012, earnings and revenue had been steadily improving since 2009.




We already know what happened this quarter. Now let’s take a look at previous quarters.



T = Trends Do Not Support the Industry

With the PC market continuously weakening, the trend is definitely not looking good. In addition to that, we have uncertain global economic conditions and an extremely competitive environment that are far from ideal.


Intel will find a way to survive, and it will eventually find a way to thrive. This is still a good long-term story due to potential related to innovation and acquisitions. However, the current circumstances are poor. When a company disappoints and delivers poor guidance, it’s clearly a time to STAY AWAY. A missed opportunity is always better than a loss.

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