Buy Intel While Wall Street Isn't Hungry For Shares

| About: Intel Corporation (INTC)

The S&P 500 managed to close today (September 19) with a very small gain of .12%, but we've seen additional underperformance in the semiconductor behemoth Intel (NASDAQ:INTC) as bad news trickles in.

The headline of the day was the retirement of Executive Vice President Sean Maloney, who was in charge of the company's operations in China. It was speculated a few years ago that he was going to replace CEO Paul Otellini, but health complications interfered.

Adding to investor uncertainty over INTC, RBC Capital Markets issued a "market perform" rating on the stock on Tuesday, which is a downgrade from the "outperform" rating that existed while the stock was trading close to $30/share. This, in addition to Citigroup's downgrade on September 13th, tells us a few things.

The most direct observation here is that Wall Street does not like Intel. The company's ability to post strong financial figures on a consistent basis while paying a dividend of 3.9% has gone largely unnoticed.

The second, which is more controversial, is that these analyst ratings are not indicative of future movements of INTC stock at all. To top it off, the rationale for the downgrades is taken directly from the company's press release, which revealed lower Q3 guidance to begin with. A weatherman who predicts a blizzard while it is happening isn't useful.

Another article published recently here on Seeking Alpha pointed out that if there's one major player that got the Intel trade right this year, it's Berkshire Hathaway (NYSE:BRK.B), which sold its INTC stake before the company softened Q3 guidance. When Intel was trading above $26/share just a month ago, I could have done the same. At around $23, I start to see value.

The retirement of Sean Maloney is unfortunate, but it's folly to consider it an impairment of the company's ability to function. The company has also scored a major victory that has been brushed off - the Droid RAZR i. I recall analysts claiming that Intel was doomed due to its lack of presence in mobile - what is the argument now?

Having said that, I will add that Intel is still fully reliant on the health of the PC/Mac market and will be for at least a few more years. Growth for INTC may slow down considerably, but it's hard to forget that the company pays enormous dividends to its shareholders to compensate. Buy Intel on the dips, and enjoy the yield until it makes more progress in mobile.

Disclosure: I am long INTC. 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.