Intel (Nasdaq: INTC) attracts a lot of institutional and retail investor interest. That's probably no surprise, given its position as a dominant $124 billion technology company. What surprised me, though, was its status as the No. 15 most-owned stock by investment clubs, as measured in April by the folks at Better Investing. Because retail investors were high on the stock, it got me to thinking: What's the consensus sentiment view on Intel?
Turns out the view is mixed. Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts really like Intel. Data from Capital IQ captures their collective feeling:
|
Opinion |
Number of Analysts |
|---|---|
| Buy | 21 |
| Outperform | 10 |
| Hold | 16 |
| Underperform | 2 |
| Sell | 1 |
| No Opinion | 0 |
Thirty-one analysts have either a "buy" rating or an "outperform" on the stock. Sixteen rate it a "hold," but only three analysts have an "underperform" or "sell" call. For purposes of this exercise, we'll classify analyst sentiment as bullish.
2. Insider buying
Next we'll look at insider buying and selling. Over the past year, Intel insiders have sold $6.38 million worth of their company stock. During the same time period, insiders bought $384,681. (Data from Form4Oracle.)
To be sure, it'd be nice to see more insider buying to balance out the selling. But it's important to note two things. One, insiders sell stock for a whole host of reasons -- to pay for a house or tuition, to diversify assets, and so forth. Second, for a company with more than a $120 billion market cap, $6 million of net selling isn't at all large in relative terms. For purposes of this exercise, we'll classify insider buying/selling as neutral.
3. Guru buying
Next, we'll look at "guru" ownership of the stock, according to GuruFocus.
In the quarter ended March 31, six investing gurus traded Intel -- three buyers and three sellers. Among the buyers were George Soros and Jean-Marie Eveillard; David Tepper and Mario Gabelli were sellers. In the previous quarter, it was a similar story: four buyers, three sellers.
With such an even distribution of buyers and sellers, we'll classify guru sentiment as neutral.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock-rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. Intel has a mostly bullish four-star rating.
5. Short-sellers
Next we'll look at whether short-sellers are circling the stock. There are 82.2 million Intel shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 1.6%. That's not very high, and so for determining sentiment, we'll classify the low short interest as bullish.
6. Does Buffett own it?
This is the "cherry on top" test, and in this case, it's a no: Berkshire Hathaway doesn't own shares of Intel. (Not much of a surprise for the famously tech-averse Warren Buffett.)
Adding it up
The consensus opinion on Intel is somewhat bullish. Analysts and the CAPS community like the stock, and in another bullish sign, short-sellers are staying away. Gurus and insiders are mixed. The only one of our quick tests that Intel fails is our cherry-on-top test -- Berkshire doesn't own shares.
Of course, you can't base an investment philosophy on who likes or dislikes the stock you own, and even a consensus bullish opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."
The purpose of this series of articles isn't to make a definitive buy-or-sell call on Intel. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on Intel's movements, and for more analysis on the company, make sure you add it to your Watchlist.
