INTC stock gets no respect and therein lies an opportunity
I am not usually a fan of buyback programs, especially not
as a reason to chase a stock. Intel (NASDAQ:INTC) announced this week that it
intends to buy back $10 billion worth of its own stock. This may be a reason to
start buying into INTC stock for of two reasons. First, it’s cheap and
recovering so investors would not be chasing it. And second, I think the intent
of the buyback from management is to project confidence in the company’s
future. You don’t buy an asset unless you believe it will be improving, so they
may have good plans forward.
Usually there is a stigma that comes with buybacks because
it could suggest that its managers have no better ideas than this. Case in
point, you never see Amazon (NASDAQ:AMZN) doing this because it invests every
penny into future businesses.
Intel here is trying to align the Wall Street risk profile
for the company with the reality of its position among investors. Simply put,
there is no respect for this formidable company especially if you compare it to
Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA).
I can’t fault the critics for not liking it because
management has been very disappointing for a long while.
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