Intel earnings for Q3 2015 come out today among unenthusiastic expectations - but now's the time to be bullish on Intel stock (Nasdaq: INTC).
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Intel Corp. (Nasdaq: INTC) reports Q3 2015 results after the close today, and the Intel dividend history has some investors hoping for a payout increase.
An Intel stock analysis shows that the company's years of investing in new chip technologies is only now starting to pay off.
Investors are starting to realize this. INTC stock is up 8.24% in the past three months, despite unenthusiastic expectations for the Q3 Intel earnings Tuesday.
When Intel Corp. (Nasdaq: INTC) reports earnings after the market close today (Tuesday), the company's guidance for 2015 will have the greatest impact on the Intel stock price.
While guidance is always closely watched, it will carry an unusual amount of weight for Intel earnings this time around. The Santa Clara, Calif.-based chipmaker withdrew its guidance for the rest of 2015 on March 12, saying it would update its yearly forecast when it released Q1 earnings.
Still, the new guidance won't be the only earnings news that could affect the Intel stock price.
When Intel Corp. (Nasdaq: INTC) reports its third-quarter earnings after the market close today (Tuesday), the world's largest chipmaker should get a boost from the improving PC market.
The Q3 INTC earnings will also tell investors whether Santa Clara, Calif.-based Intel has been able to make any headway in its lagging mobile business. In addition, we'll learn whether its one-year-old Internet of Things initiative is still on track.
Sadly, some are still looking in the rearview mirror.
Take the case of Intel Corp. (Nasdaq:INTC). The world leader in PC chips has just announced it's borrowing another $6 billion.
Of course, borrowing money isn't necessarily a bad thing. It's the purpose of the debt that matters most.
Here's the thing. Intel is taking on more debt to help it buy back more of its flagging stock. See, the senior brass think that at $20 a share, Intel stock is a great value. And on paper, they're right.
After all, Intel has strong profit margins. Not only that, but its 15% return on assets is solid. It means that for every dollar the firm invests in assets, it earns 15 cents.
Try getting that rate on a bank CD. Or a T-bill, for that matter. Pretty much, it's impossible.
No, the problem for Intel and its shareholders is the stock has become a "value trap." In other words, investors buy the stock because they see they only have to pay nine times earnings and think it's a great bargain.
But, as I like to remind tech investors, a $20 stock that goes down is a lot more expensive than a $200 stock that goes up. Look at it this way, if you had simply bought an index fund tied directly to the S&P 500 you would have made a nice 12% return so far this year.
Holding Intel, however, would have cost you more than 19% as of last week. By buying its own stock, Intel isn't getting anywhere near the return it could by simply buying a basket of equities.
And it's actually much worse than it seems. This next number will blow your mind...