This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Intel Into Earnings Is a Strong Buy

Stocks in this article: INTC AMD QCOM NVDA TXN STX WDC

Don't count on Intel missing the second act of this show or giving up in the mobile space. They have everything they need to take on Nvidia in both central processing and graphics processing. That's my case for Intel remaining attractive; here are ways to time the upcoming earnings.

The easiest way is to wait. Boring yes I know, but if you're not comfortable running across a busy street, don't force it. The mark of a true pro is the ability to do nothing when everyone else can't wait.

If you're ready to buy, you might as well let options work in your favor. Intel options typically rise immediately before earnings. The February $22 strike put options will probably sell for about 85 cents above intrinsic value based on a share price of $22.

If you sell the puts and Intel falls after the earnings release, you still make money as long as the options expire with Intel trading above $21.15 a share. You will have a choice to keep the shares with an effective cost basis of $21.15 or sell them. It's a great way to get a discount if you're going to buy shares either way.

If Intel's shares increase after the earnings, this is still a winning trade relative to buying the stock all the way up to $22.86 or more. Above $22.85 you begin to lose possible capital gains, but you still make almost 4% in about one month (or less).

The most important reason to use options in my opinion is they allow you to lower your risk. Selling a $22 strike put lowers the amount an investor can lose to $21.15. Managing risk is the key to long-term profits. INTC Revenue Quarterly Chart INTC Revenue Quarterly data by YCharts

At the time of publication, the author was long INTC.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs