09-27-2013, 04:58 PM
(09-27-2013, 04:14 PM)fiveoh Wrote: I'm debating dumping the rest of my intel even though I would take a 10% loss on it. I just dont see them turning it around in mobile and their cash flow is getting lower and lower....
I remain pretty worried about Intel as well. As you can see over here, my portfolio is very exposed to INTC (see post #2 in that thread), and I am strongly considering paring it dow substantially. I've never written any covered calls, but this might be the time for me to try it. Collect a little premium with s strike price likely to have the shares called away from me.
(09-27-2013, 04:27 PM)hendi_alex Wrote: Matt who posts on my Income Investing and Beyond Board at Investor Village seems to be pretty savvy wrt to tech. He has had some well thought out posts related to both Apple and Intel. I don't think that he would mind me sharing this one in depth INTC post. I'm overweight INTC at 13% weighting but also have sold calls against 100% of the position. Have generally been long INTC for most of the past three years except for a few months when all shares got called. Cuurently my calls are laddered from $21 up to $24 and my average cost is a bit over $22. Dates go out as far as April.
Thanks hendi_alex, good read. I'm trying to remain hopeful that Matt is correct in his analysis, but I've been reading about INTC "righting the ship" for a looong time now with no apparent progress. Seems like Intel's plans are always about to pan out "next year." Meanwhile, the earnings and cash flow situation continues to deteriorate. Moreover, even if Matt's thesis is correct, it doesn't address the margins issue. Even if Intel is able to stabilize server and laptop revenues, and to make some inroads into mobile, I can't escape thinking that any gains they make in market share will be more than offset by eroding margins. I don't know much, but fear that chips are fast becoming commoditized in a way that will make it difficult for INTC to grow revenues again, even if it has popular mobile chips.
At any rate, I would not dump all of my Intel, just take it from heavily overweight in my portfolio down to average. It is now 9.4 percent of my portfolio's value. It would still be a healthy allocation at half that. Maybe this weekend I'll ask your advice over in the options area about how best to write the covered calls to unload some shares while collecting a nice premium.