SMART MONEY GUYS DALIO AND COHEN DUMP INTEL SHARES
Intel (NASDAQ: INTC) is another big dividend paying stock – a 4.3% yield – which hedge funds are quickly falling out of love with. Intel is down almost 15% year to date given an uncertain future for PC demand. The onslaught of market share infringement by smartphones and tablets has caused recent downward revisions for next year’s EPS; consensus is now 15% lower than it was three months ago. This large-cap tech giant might be another value trap – much like Best Buy – where it trades at 9x forward earnings and boasts a 0.8 PEG. We cautious the use of these metrics might be compromised due to Intel’s lowered expectations next quarter, and continued weakness in developed markets. Intel also saw billionaire Steven Cohen and SAC Capital sell off a massive portion of their shares last quarter
Margin is important because it determines what percentage of revenue is available for earnings.
The more important measure of value to the investor is margin dollars per share and growth of margin dollars per share.
Anyone who disconnects margin from revenue does not understand the relationship.
Value trap? Only for the unimaginative.
Not if you are looking for a 4.5% yield on a chunk of money.
Not if you acquire share selling put options at a 4% discount.
Collect the dividends (at 4%) and sell call options while you own it at 2%.
The firms are notable. The SAC options trades would likely be more visible that the share liquidations, depending on strike and month.
Bridgewater held 523,000 shares of INTC and it was 0.22% of its portfolio. They liquidated.
SAC Capital Advisors had a more complex position in INTC.
They owned 100,000 put option contracts and increased to 110,200.
290,374 shares decreased to 113,371
1,985,600 call options.decreased to 285,600