It seems like time to re-evaluate my longer term view of Intel, but in the interim the valuation just seems too compelling to ignore trading around the current position. At the most basic level of analysis:
- They still seem on track to earn around $2.50/share.
- Putting a reasonable 12 multiple on the stock
- Still gets to the $30 price target.
- Oh, by the way, it pays a 3.5% dividend with a rock solid balance sheet
There are essentially two outcomes each with about a 50/50 chance.
- The stock will hold $25 over the next three days and we earn 1% in 3 days.
- The stock stays below $25 and we are the proud owner of another lot of Intel at an effective price of $24.73. The stock will go x-dividend in early August earning another $.21 lowering the break even point almost another 1% to $24.52. In this case, CCI is willing to hold this position for awhile and hope for better days.