Is the Intel Sell-Off an Overreaction?

With shares of Intel (NASDAQ:INTC) trading at around $21.17, is INTC an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Intel is down over 6 percent so far today, which relates to recently released poor results. FY 2012 revenue came in at $53.3 billion. Net income came in at $11.00 billion. In Q4, sales dropped 3 percent and profits dropped 27 percent on a YoY basis. Revenue dropped 6 percent, which was mostly attributed to a weak PC market and weak macroeconomic conditions. To make matters worse, Intel expects a 6 percent decline in revenue for the current quarter.

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Looking ahead, Intel has a lot in the pipeline, including Haswell and nanometer version of Atom. There might be potential in these areas, as well as with Ultrabooks, but considering Intel’s PC client group is responsible for more than half of Intel’s sales, this company is facing an uphill battle.

The good news is that Intel has strong margins, operating cash flow over $19 billion, and a nice yield of 4.10 percent. Let’s take a look at some more important numbers.