Can tech stocks be Deep Value trades?
Not often, but yes.
Just over a year ago, Intel (INTC) was getting hammered. At that time, all of tech was getting crushed because of the Bear Market.
And INTC was no different.
It fell from its “fairly valued” price of $53 at the start of 2022 all the way down below the Lower Band around $25.
At that point it was deeply undervalued.
But if we waited for the carnage to subside and bought when price moved above that Lower Band, we would’ve gotten INTC “on sale” and would’ve also had some momentum behind us.
Here’s the Daily chart:
As you can see, we hit the long-term simple moving average/”fair value” in less than a year.
That was about a 50% move with no real pain for most of 2023.
And look what’s happened to INTC recently.
A horrible earnings report has knocked the stock down below the Lower Band once again.
Price is currently around $20.70.
“Fair Value” is currently around $39.26.
Will we see another big move from INTC?
We’ll see.
Happy trading,
— Scott Welsh
More than HALF of S&P 500 stocks are down over the last two years…
Yet IRM has outpaced the entire S&P 500 by more than 5X the return!
(without even counting dividends)
