Intel is a company, which is making microprocessors used in laptops, PC, powerful computer servers, etc.
In recent years, PC market is shrinking due to introduction of smart phones. With smart phones, people tend to surf Internet or doing Internet banking or transactions on the phones instead of a PC as used to be.
Last year or so, Donald Trump and US government invested billions of USD in Intel for it developing/manufacturing AI microprocessors, nano-meter technology, etc. in USA to compete with one of its competitors, TMSC of Taiwan.
Its share price has shot up significantly from around $19 USD towards $142 USD in relatively short time. I have bought INTC shares around $20 USD and sold all of those around $120 USD, because I found it was ridiculous with market cap above $600B USD and relatively low revenues/earnings.
Currently its market cap is $486.59B USD after going down -29.52%. It is a big corporation. Can you imagine that a big company could go down -29% like this in a day or perhaps a few hours yesterday?
Everything is unpredictable in the stock market. Those big investors are quick and they make decisions in the stock market or an individual stock up/down trends.
Therefore we should spread (bet because we don't have crystal ball) our investment in many "good" stocks. Hope we have more right guess than wrong guess.
In the quarter earnings report, Intel warned that the PC market is slowing down. This is a warning to investors in the chip marking corporations including AMD (a microprocessor manufacturer). This made sell off in other chip marking corporations. Below is AMD snapshot even without any news or actual earning report.
As in my earlier notes about Brazil stock markets. Most of corporations have down between -20% to -30%. I have many shares of STNE because this company was operated fine during the previous president, and now he's re-elected. Investors said that the Interest rate was high due to big spending by governments, which caused high inflation. Of course, the re-elected president must get their economy back to its feet. STNE would be doing better by that time. It went down a bit with the overall stock market. Why did not I wait until now for better prices?
Back to the day its share price was down around -29%, which was a lot.
- I didn't have a crystal ball for its future price.
- STNE was a good stocks. Its performance was good and had been considered under value before -29% down.
- the market may realize that they oversold STNE and pushed its share prices up more than +10% the following day after -29%.
- buying shares of STNE before -29% down was good, so why shouldn't I bought more shares with huge discounts of -29%?
- currently its PE is 3.17 and forward PE is 0.71, which is ridiculously low. Its market cap is $1.85B USD. However it will take time until big investors came back and pushed it upwards.
- look at most of stocks out there, their PE are above 30%.
Its business is not exactly the same as Bank of America, but BAC market cap is $354B USD and PE is 12.3.
I also include snapshot of TD Bank of Canada for information.
By the way, we are in a market corrections, recession, or in panic mode due to "sudden awakening" of high investment cost in AI business by investors. They are selling high tech firms.
Market trend (all stocks) is going down. When will it stop and start going up again? Nobody knows.
It is a good time to select good beaten down stocks and decide if it is a good deal for you. Market will recover after plunging as history has proved this many times in decades. It may go down deeper in the future even with a brief rebound (up). Don't forget this.
------------------
Author: Vinh Nguyen at canvinh@gmail.com
No comments:
Post a Comment