- I recently wrote about why I sold my position in Intel, citing capital allocation needs and questionable short-term performance.
- I was destroyed in comments from Intel longs and readers.
- I continue to think that Intel is a safe long-term investment, despite not having a position.
I swear I'm not bearish on Intel.
Intel longs seem to hate me now, anyway.
Intel (NASDAQ:INTC) is one of the most argued about and followed stocks on Seeking Alpha right now. The company, which has a great fundamental foundation for long-term growth, has been mired in the quicksand of sales over the last couple of quarters, and has been working on changing its vision for the future in how it does business and innovates.
The company's primary focus remains adoption in tablet and mobile, while trying to get a jump on wearables and smaller products through their Quark line of processors.
The stock has had a great last couple of months, up from lows of $23.77 to $26.16, where it closed on Friday.
I found out last week that a good way to fall out of favor with large groups of people is tell them that you've sold the stock they all hold.
I tried to go about announcing my sale in an honest way. I told people that I wasn't necessarily bearish on Intel for the long-term, but that short-term capital allocation needs forced me to re-evaluate my position in the company and liquidate.
I concluded my sentiments by saying:
Do I think Intel is an absolutely horrible stock to be in for the long-term? Of course I don't. It pays a dividend, has a good balance sheet, and is going to be around for many years to come. Do I think Intel is ripe for a short to mid-term trade? Absolutely not. I think there's still work that needs to be done at this point before we see Intel push up towards $30/share and, thusly, I made my decision to sell my Intel shares for the time being and enter an Intel holding pattern.
The purpose of this article is to re-affirm that in the long-term, I don't really have any beef with Intel. It was a short-term decision to sell my holdings so that I could free up the capital for other needs - Intel didn't make the cut of equities that I absolutely needed to be holding right now - that's it.
Immediately, via comments and private messages, Intel perma-bulls accused me of everything from not knowing what I was doing to manipulating the market by claiming I was bullish in past articles and then selling my shares. I had never received such a major pushback from Intel investors.
Even as I responded individually to some people via private message, they were saying things like "you know it was just a swing trade." There was absolutely zero part of me that had intentions of a swing trade when I entered into my position with INTC. Thus, I reported my intentions of it being a long-term hold.
Well, it wasn't. When I bought INTC, I bought with intentions of holding long-term. Sometimes, as someone who manages funds, you have to make decisions. Opportunities arise that you need powder for, or you find yourself over-committed. This was a combination of those two situations. So, I liquidated my INTC holdings. Not because I thought it was going to drop and I was going to buy back in, but because I needed the capital elsewhere. And I'm 100% not against getting back into Intel at some point in the future - so, what's the big idea?
I pride myself on being as transparent as possible in the moves that I make, for purposes of writing about them and offering insight. Simply put, when I make a trade, I generally write about it. If I was trying to "manipulate" the market, I simply wouldn't have told anyone when I sold Intel. After all, it's not like I went short thereafter.
And the short-term concerns that I cited aren't some crazy things I've just made up. The PC market has been declining still, as I've followed it. Twice when I thought it bottomed, sales have continued to wane. Further, Intel's capex to be spent on Cloudera does anything but reassure investors of the company's vision for the short term. So, again - while I think in the long-term, the company will be fine - there certainly are some short-term questions still up in the air.
One noted Intel bull is Ashraf Eassa, who was part of the constituency to give me beef over the way I've presented my positions in Intel - honestly and transparently. Ashraf is a resident expert on the company and on the semiconductor industry, and someone whose work I respect. So, to see him claiming malintent with the way I've positioned myself on Intel for the short-term baffled me. Ashraf himself recently just penned an article about Samsung "giving Intel the boot" on its tablets. In it, he concludes that even though Intel is likely to still see improvement in tablets (and presumably mobile as well) this year, its parts need to be better:
Intel is still likely to see success in tablets this year, particularly as it enables the smaller Chinese and Taiwanese players with competitive parts, but to win a company like Samsung -- which has close ties with Qualcomm (NASDAQ:QCOM) and its own silicon teams -- Intel's parts need to be unequivocally better. And as nice as Bay Trail is, it just doesn't fit that description. It's too expensive and powerful for Samsung's low-end tablet line, and too weak for the high end. Fortunately for Intel, Samsung has no monopoly on the Android tablet market.
So, backhandedly, he's even making my argument for me with regards to the short-term, a bit. Intel is still on the back end of the adoption curve with tablets. But, they'll get there. I have zero doubts about that.
And for the long-term, read this slowly: Intel remains a sound investment. There's no doubt I will again be a shareholder at some point, and I want to reaffirm my sentiment which I obviously failed to make clear in my last article; I'm bullish on Intel for the long-term.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.