INTC Lost 16% In A Month. Do You Buy Or Wait?
Intel (INTC) stock is down 16.2% in 21 trading days. History of recovery post-dips is not on your side and there is fundamental risk – specific to growth, profitability and downturn resilience. Consider the following data:
- A $87 Bil company with $53 Bil in revenue currently trading at $19.95.
- Last 12 month revenue growth of -4.0% and operating margin of -7.8%.
- Has Debt to Equity ratio of 0.6 and Cash to Assets ratio of 0.1
- Currently trading at P/E multiple of -4.5 and P/EBIT multiple of -8.7
- Has returned (median) -0.2% within a year following sharp dips since 2010. See INTC Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for INTC, see Buy or Sell INTC Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and INTC drops another 20-30% to $13.96 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Intel (INTC) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Before that, as a quick background: INTC designs, manufactures, and sells computer products and technologies, partnering with MILA to advance AI methods for drug discovery across multiple business segments.
2022 Inflation Shock
- INTC stock fell 63.3% from a high of $68.26 on 9 April 2021 to $25.04 on 11 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $50.76 on 27 December 2023 , and currently trades at $19.95
| INTC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -63.3% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- INTC stock fell 34.8% from a high of $68.47 on 24 January 2020 to $44.61 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| INTC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.8% | -33.9% |
| Time to Full Recovery | Not Fully Recovered days | 148 days |
2018 Correction
- INTC stock fell 26.1% from a high of $58.82 on 22 April 2019 to $43.46 on 3 June 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 November 2019
| INTC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -26.1% | -19.8% |
| Time to Full Recovery | 176 days | 120 days |
2008 Global Financial Crisis
- INTC stock fell 56.8% from a high of $27.98 on 6 December 2007 to $12.08 on 23 February 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 March 2012
| INTC | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -56.8% | -56.8% |
| Time to Full Recovery | 1127 days | 1480 days |
Worried that INTC could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.