Today I had a limit order filled for INTC. I picked up an additional 50 shares of Intel for 19.50 a share. This gives me an average share price of 20.83. This is close to the price of Intel a year ago when I first started watching it. I only had to wait a year to get a chance to own these shares at a price I was willing to pay. I’m nothing if not patient. Having said that how do I know that INTC will not drop more? That is easy to answer: I don’t!
An earnings miss is what started INTC’s price drop over the last three weeks. Then we had the overall market dip after the election. Now we have news the CEO will be retiring in May of next year. Wrap all this up in continued pessimism that Intel will not be as competitive in the post pc era and you can see why there has been a downward trend in price over the past couple of months.
Any time I put my capital into an investment I look at it in terms of years not quarters. This helps me to sort out what is relevant and what is “noise”. I think INTC has hurt itself short-term by not aggressively moving into the mobile market. I believe management now realizes this was a mistake as well. Companies are run by humans and as such they sometimes make poor choices. As with individuals, if a company learns from its mistakes and moves forward then progress can be made. I think Intel has the financial strength to continue spending on R&D as well as acquisitions. If management can adapt to the change in consumers preference for mobile devices then I believe Intel will continue to be a player in the tech sector.
What do you guys think? Is it time to buy INTC or is it a washed up company with its best days behind it?