Intel (INTC) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Intel ( INTC) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Intel as such a stock due to the following factors:

  • INTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $581.4 million.
  • INTC has traded 20.4 million shares today.
  • INTC traded in a range 201.3% of the normal price range with a price range of $0.55.
  • INTC traded above its daily resistance level (quality: 32 days, meaning that the stock is crossing a resistance level set by the last 32 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on INTC:

Intel Corporation designs, manufactures, and sells integrated digital technology platforms worldwide. It operates through PC Client Group, Data Center Group, Other Intel Architecture, Software and Services, and All Other segments. The stock currently has a dividend yield of 3.4%. INTC has a PE ratio of 14.1. Currently there are 11 analysts that rate Intel a buy, 4 analysts rate it a sell, and 14 rate it a hold.

The average volume for Intel has been 28.2 million shares per day over the past 30 days. Intel has a market cap of $130.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.85 and a short float of 3.7% with 8.39 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Intel as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • INTC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, INTC has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for INTEL CORP is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.12% trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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