Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
Money Morning LIVE is (in)famous for its high-profit trading shows, like Kenny Glick's. Every day, he trades the 25 highest-volume stocks with his proprietary VWAP system.
I love trading, too, don't get me wrong, but I've been working with guys like Chris Johnson and Tim Melvin to build a world-class model portfolio of stocks.
People would pay thousands for access to research like this, but to hell with that: We're giving these picks away for free.
That said, it's not a flashy portfolio. The investing zeitgeist today is "buzzy." It's all about crypto (understandable), the inflation trade, charging stations, and infrastructure, for instance. That's not necessarily bad; I think there's plenty of money to be made there... but if I hear the word "metaverse" one more time, I might jump out the window.
The big focus for this portfolio is value. That's a really overlooked quality - it might have something to do with the S&P 500 trading at 29 times earnings - and it's not exciting, but its moneymaking power is undeniable.
Now, you can always go right here to get free Money Morning LIVE updates, but I'm going to share one pick with everyone right now...
Here's the Week's Top MML Value Pick
It's intractable, too. Back in 2020, when the shortage first became apparent, it was thought there would be "a few months" of tight supply. Twenty months later... and the most optimistic analysts say we'll be wading through this until mid-2022 at the earliest, or maybe into 2023.
The shortage has been bullish for the semiconductor sector as a whole, though; the iShares Semiconductor ETF (NASDAQ: SOXX) is up nearly 200% since its March 2020 "COVID Crash" lows.
One of our favorite semiconductor stocks is Intel Corp. (NASDAQ: INTC), the world's largest chip company by revenue and America's "ace in the hole" in the high-performance semiconductor race - a race with massive strategic implications across the globe.
Intel has a long history of innovation in semiconductors that put it miles ahead of the competition for years, but lately, its INTC stock has lagged the competition. That under-performance is largely because Apple Inc. (NASDAQ: AAPL), whose supply chain requisites can move entire markets, decided to ditch Intel chips for some of its most popular products.
The government, though, is determined to keep Intel out ahead. Semiconductors are practically a strategic national resource. They're vital to infrastructure, for sure, and commerce, but our increasingly tech-centric military is really what the administration has in mind when it diverts billions to the U.S. semiconductor sector.
Profit from the Rebirth of American Manufacturing
The "re-shoring" of essential manufacturing is a priority for the White House, and it's easy to see why.
Chips are in everything from radios to fighter jets to ballistic missiles subs. Intel, for instance, was mulling plans to make silicon wafers in Chengdu, China, when the Biden administration "suggested" it re-think the idea, citing the national security concerns that come from manufacturing a strategic resource in a rival country. Intel will instead build out capacity in the United States and Western Europe.
Intel's CEO, Pat Gelsinger, has gone on record as saying that, by 2024, Intel will make the fastest chips in the world. I think Gelsinger's absolutely credible when he says this, and I think you want to own this stock way before then.
None of this is baked into Intel's stock price yet, and the weakness it's seen over the past month is a historic opportunity for investors to be in a critical growth sector at a huge discount.
INTC is extremely undervalued at the moment, especially in comparison to its sector rivals. This stock trades at 9.8 times earnings as I write this. By comparison, Micron Technology Inc. (NASDAQ: MU) trades at 14.85 times earnings, and NVIDIA Corp. (NASDAQ: NVDA) goes for, good grief, more than 106 times earnings. That tells you everything you need to know about Intel's status as a value stock.
Follow Money Morning on Facebook and Twitter.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.