This Day On The Street
Continue to site
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

Why Warren Buffett Would Buy Intel's Stock Now

NEW YORK (TheStreet) -- At the risk of sounding like an Intel (INTC - Get Report)INTC apologist, the chip company seems to be grossly misunderstood.

Despite the potential that now exists in the company's move toward the Internet of Things, Intel remains a haven for bears who can't or won't forgive the company's management for having missed the growth opportunity in mobile. But that's in the past. Investing is about the future. And no one knows that better than Warren Buffett.

It has been two years since Buffett's Berkshire Hathaway (BRK-A)BRK-A sent shockwaves through the tech world he dumped his stake in Intel, shunning his buy-and-hold strategy.

Through August 2011, Berkshire had accumulated 5.66 million shares in Intel for an average price of $22.05. Then two months later, Buffett's company added 5.84 million shares for an average price of $21.46.

It was then learned on May 8, 2012 that Berkshire sold all of its 11.5 million shares for an average price of $27.25, netting roughly $63 million. Not bad for nine months' worth of work.

It was not unusual for Buffett to reshuffle his portfolio. That same year, investors learned that Berkshire cut its stake in Johnson & Johnson (JNJ)JNJ and Kraft Foods (KRFT)KRFT. It was a clear lack of confidence in Intel, nonetheless. And for that matter, a well-timed move.

After Buffett's exit, Intel's stock lost roughly 30% of its value during the next six months, falling as low as $19.11 and closing the year at $19.47. Intel's stock has never been the same since, which is precisely why Buffett might consider buying again.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
INTC $29.90 0.17%
AAPL $93.24 -0.41%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs