/SI/Tommy – But it's on a weak Dollar so we have to wait for the Dollar to bounce and see where /SI bottoms out. Could get worse.
Gold is holding up well though as Central Banks are hoarding it again.
INTC/Mike – You would think $45.50 is cheap enough as that's just over $200Bn and they dropped $21Bn to the bottom line last year and this year is guided lower but only about 5% lower though now we're back to the 2018 avg price so maybe it's the mover to $59 that was silly, not the move back to $45.
| Year End 29th Dec | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg | |
| $m | 52,708 | 55,870 | 55,355 | 59,387 | 62,761 | 70,848 | 70,843 | 68,660 | 71,693 | +6.1% | |
| $m | 12,291 | 15,347 | 14,002 | 13,133 | 18,050 | 23,316 | 23,020 | +13.7% | |||
| $m | 9,620 | 11,704 | 11,420 | 10,316 | 9,601 | 21,053 | 20,573 | 19,606 | 20,491 | +17.0% | |
| $ | 1.89 | 2.31 | 2.33 | 2.12 | 3.10 | 4.41 | 4.36 | +18.5% | |||
| $ | 1.92 | 2.36 | 2.39 | 2.40 | 3.16 | 4.40 | 4.35 | 4.29 | 4.58 | +18.0% | |
| % | -9.8 | +22.6 | +1.4 | +0.4 | +31.6 | +39.2 | +24.3 | -2.43 | +6.54 | ||
| x | 10.6 | 10.7 | 10.9 | 10.2 | |||||||
| x | n/a | n/a | 1.66 | 1.83 | |||||||
| Profitability | |||||||||||
INTC tends to grow in spurts and their guide-down was related to the retooling they are doing to launch 10nm chips in 2020 and 7nm chips in 2021 (with Xe graphics that are supposed to be amazing). Coming out with 2 layers of massively better chips tends to depress current sales (companies put off buying now for better chips next year)
Also, keep in mind that this is a company spending $13Bn a year on R&D – if they ever need to hit their numbers, a very small R&D cutback would do the trick.
So, as a long-term hold, INTC is great to have in the portfolio but, short-term, don't expect there to be much action. As a warm-up, I'd certainly consider selling the 2021 $40 puts for $4 to be free money as the net $36 entry would be a gift for a company on track to make $6/share in 5 years. In fact, we can sell 20 of those in the LTP for $8,000 and 10 in the OOP for $4,000.
Now, if you don't want to wait to add a long spread, I'd go conservative with the 2021 $35 ($13)/45 ($7) bull call spread at net $6 on the $10 spread so all INTC has to do is not go lower and it makes 66% but paired with the short puts, it's net $2 on the $10 spread with an $8 (400%) upside potential if INTC simply stays flat from here.
Long/Dawg – Well Europe is closing soon so MAYBE they are putting on the selling pressure and I'd use 25,500 on /YM and 1,550 on /RTY as my long spots (tight stops below) and they are lined up with /ES 2,835 and /NQ 7,468 so if any of them fail – it's not worth staying long as there's no change in news and we still may get a retaliation announcement from China though they are sleeping now so more likely over the weekend or later tonight.
