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Buy Intel, Yahoo! and Alcoa; Sell Infosys

Value investors should take this as an opportunity to get in on a good company. It is facing some headwinds at the moment but has a solid history of performance. Though the market may wish to discount the shares, investors can feel reassured that the company's management appears focused on what it can do to produce growth and generate value for shareholders.

Reason to Buy Intel

The chip giant will be reporting its second-quarter earnings on Tuesday after market close and analysts are expecting revenue of $13.60 billion -- topping the $13.03 billion it reported in the same period of a year ago. However, while its revenue is expected to arrive on the higher end, it is expected to shed 1 cent from its earnings per share to 53 cents from its report of a year ago of 54 cents.

The stock is currently trading at $25.25, almost 20% under the average analyst price target of $29.71. I expect the stock to rise moderately post earnings and expect the company to beat on both the top and bottom lines -- that's what it does. The company has either met or exceeded estimates in each of the past four quarters.

As the stock continues to trade at what I believe to be a considerable discount with a price-to-earnings ratio of 9, I see at least 25% more upside in the shares in the near term, putting the stock at $32 and possibly $35 by year-end. Furthermore, the company will undoubtedly log its best financial performance in 2012.

Investors should expect Intel to demonstrate continued strength in emerging markets, from the explosion of smartphones and mobile devices and from corporate and consumer migrations towards cloud infrastructures. If you are a value investor looking for a safe investment in technology and one that pays a respectable dividend, you should consider Intel.

Reason to Buy Yahoo!

As with Intel, search giant Yahoo! Is expected to report earnings on Tuesday after markets close. Also similar to Intel, it has met or exceeded analysts' estimates in each of the past four quarters -- and I don't expect this one will be different. For the quarter, the company is expected to report revenues of $1.09 billion -- topping the $1.08 that it reported a year ago.

Earnings per share is expected to arrive at 23 cents -- topping the 18 cents per share that it registered during the same quarter of a year ago. Though the company has been down of late, investors continue to misinterpret its story. Yahoo! is also profitable, with a considerable amount of cash and some interesting and somewhat appealing assets.
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AA $9.94 0.71%
INFY $16.98 0.30%
INTC $28.94 -0.07%
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AAPL $122.82 -0.45%


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