It's become one of my favorite stocks. I like to call it my
"no-brainer" investment for 2012. I've even selected it as
one of my
Top 10 Stocks for 2012.
The company is buying back billions of its stock. It has
raised dividends at a torrid pace over the past five years.
And the company just announced its sixth consecutive quarter
of record sales.
Just days ago Warren Buffett's Berkshire Hathaway (NYSE: BRK-B)
even announced it has taken a 9.3 million share stake in the
stock, a position worth over $200 million.
I'm talking about Intel (Nasdaq: INTC).
You likely know Intel already. It's a major blue-chip
company and the world's largest semiconductor maker. It
holds an 80% stranglehold on the PC semiconductor market. No
one else even comes close. The computer you're reading this
on is likely powered by an Intel chip.
Some people may see the stock as "boring" and say that it
hasn't gone anywhere for years. But I see something
different, and I think Warren Buffett sees the same thing.
Simply put, Intel's shares are becoming more valuable
quarter after quarter, but the share price hasn't responded
Simply look at the stats...
- Intel is in the middle of an enormous share buyback spree.
Over the past year, it has spent $11.5 billion to purchase
538 million shares. It still has $14 billion allocated to
future buybacks -- that's more than 10% of the outstanding
- The company holds more than $15 billion in cash on the
books. That comes out to $2.97 per share... more than 11% of
the current share price.
- Quarterly dividends have increased from $0.10 per five
years ago to $0.21 per share today. That's growth of 110%.
And in the last two years dividends have grown 50%.
- Right now, Intel's shares trade near the same level they
did back in the spring of 2010, when earnings were just
$1.09 per share during the previous 12 months. But today,
earnings over the last year total $2.31 per share -- more
than 100% higher.
It doesn't take the expert investing skills of Warren
Buffett to see why Intel could go higher in the months and
years ahead. (For more details on Intel, I've profiled it
the recent presentation I put together on my Top 10 Stocks
You can read the entire profile here.)
But there's another reason why I like Intel so much. After
years of research, I've found that more often than not,
companies that fit within a few simple categories are the
ones that make you the most money long-term.
Intel fits all these characteristics perfectly. It's why I
think it's a "no-brainer" investment. Strong companies that
take care of their shareholders tend to do better over the
long-run. It doesn't take a PhD to understand that.
Of course, with investing there's never a surefire thing.
Even the seemingly strongest companies aren't guaranteed to
deliver a positive return.
But that said, if you invest in companies with one or more
of these three simple traits, then I think it gives you the
best chance of making money.
[Note: As I said above, I selected Intel as one of my
Top 10 Stocks for 2012. But it's far from the
only stock my staff and I found that has the traits
described above. For more on this select list of 10
companies, you can read the research my team and I put
visiting this link.]
All the best,
StreetAuthority Co-founder, Chief Investment Strategist --
Top 10 Stocks
Paul Tracy owns shares of INTC.
StreetAuthority owns shares of INTC as part of Top 10 Stocks'
$100,000 "real money" portfolio. In accordance with
company policies, StreetAuthority always provides readers with
at least 48 hours advance notice before buying or selling any
securities in any "real money" model portfolio.