Ox, INTC reached an interim high the week closing 10 Aug. Since then, this is the 14th week of a downtrend. I made note of the downtrend in this past weekend postings. To me this is not a good sign. INTC has to be considered a bellweather stock, and IMO, INTC needs to be healthy and in a growth mode to provide a guideline for the whole semi sector to be healthy. True, INTC is a "semiconductor" stock and not a "semi equip" stock, but it sure helps the semi equip sector in general when it is healthy and buying capital equipment to meet expanding requirements for semiconductors. Correlation of this fact was featured again today with the release of the SEMI BtB of 0.75 for the month of October.
Let's look at the 1 yr weekly chart of INTC and some other tabular data on earnings, both past, present, and future. The chart shows the downtrend of the last 14 weeks. The last red bar shows the results of the first 4 days of this week, and with the results so far, the week results will be down again. Presently, the downtrend is at -25.5 percent.
Looking at the data in the table, it is not hard to understand why the downtrend is taking place. In a word, earnings picked up out of the recession with higher actual numbers of 1.02, 2.05, and 2.11 for 2009, 10 and 11. However, the estimate for this CY/FY 2012 is down from the actual for 2011. Even worse, after the 3rd quarter 2012 results were just posted, the earnings estimate for 2013 was reduced to the present 1.97. This number is lower than the actual results of 2.05 achieved in 2010.
Also, notice how the chart action follows the earnings estimates in the table for 2012. For the first part of 2012, the estimates for 2012 increased and the stock price increased. In the latter part of the year, the earnings estimates started coming down and the stock price has been declining. Very good correlation over all. The table also shows the earnings estimates for 2013 following the same pattern.
INTC is a good stock to watch carefully. Until it can find a bottom, flatten out, and then start an uptrend, I am very cautious in investing in anything in the semi area. I know there are a few stocks bucking the present trend, but at the moment, I am being very careful.
Don
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