Coupled with the stark uncertainties about where global economies are heading in the COVID-19 era, the market ups and downs over the past few months should be enough to give any investor the jitters.
But instead of worrying about timing your entry right, portfolio manager Gordon Reid says to just find quality names like Intel Corp (Intel Corp Stock Quote, Chart, News NASDAQ:INTC) and stick with them.
“From an entry standpoint, if you’re a long-term investor it’s more important that you take
a position, that getting bragging rights about where you bought it on a short-term chart,” said Reid, president and CEO of Goodreid Investment Counsel, speaking on BNN Bloomberg Wednesday.
“Intel isn’t an expensive stock. It trades [at] less than a market multiple and it’s at a sweet
spot in terms of its development,” Reid said. “They spend about $18 billion a year on R&D, so they’re constantly developing money-making applications for the future.”
Reid said being in the semiconductor group is “a particularly good place to be” for Intel, with the emergence of 5G networks and the investment required to get this next generation mobile network up and running.
Intel has divested itself of its 5G modem business, selling to Apple last year, but is still invested in the new technology wave through its Data Center Group segment, with its artificial intelligence and embedded IoT tech.
The tech giant’s share price had a remarkable run over the back end of 2019, climbing 34 per cent between August and the end of the year. The stock was hit hard by the market pullback in February and March but it has recovered a good chunk of that ground since.
The jury is out, of course, on how deep the pain will be regarding the COVID-19 pandemic, both in North America and worldwide, but Intel gave a hint of how the new realities of stay-at-home and remote work might impact the company when it reported its latest quarterly results in late April.
Intel’s first quarter 2020 featured revenue of $19.83, up 23 per cent year-over-year, with its “data-centric” revenue up 34 per cent and its “PC-centric” revenue up 14 per cent. That top line bested analysts’ forecast of $18.70 billion.
At the time, management declined giving full-year guidance based on the uncertainties surrounding the pandemic but was calling for second quarter revenue of $18.50 billion with earnings to come in at $1.10 per share versus $1.28 per share for the Q1. Intel said demand for its product would likely stay strong during COVID-19 as people look to stay connected via technology.
“The role technology plays in the world is more essential now than it has ever been, and our opportunity to enrich lives and enable our customers’ success has never been more vital. Guided by our cultural values, competitive advantages and financial strength, I am confident we will emerge from this situation an even stronger company,” said CEO Bob Swan in the first quarter press release.
For his part, Reid said choosing the right name for the long term is how investors should be playing the COVID crisis.
“Make an investment with Intel and make sure it’s measured, make sure it’s balanced,” Reid said.