Sell Intel (INTC)
I’m recommending that we sell our position in Intel (INTC).
The company came under selling pressure this week after CEO Pat Gelsinger departed the company in the midst of the company’s four-year turnaround plan. Investors were losing confidence in the CEO after the latest earnings revealed, among other disappointments, signs that Intel is losing its position in the x86 CPU market, as the firm posted a 7% year-on-year decline in its client computing business.
While our position in Intel initially showed promise, the sudden departure of the CEO, along with the obvious loss of investor confidence following the news, calls into question the intermediate-term strength of the turnaround.
Given that the stock is close to a multi-year low, with the potential for additional selling pressure should this low be broken, I’m recommending that we exit this position today in accordance with our money management discipline. (I’ll have more to say about Intel in tomorrow’s weekly update.) SELL
Sell a Quarter of American Airlines (AAL)
I’m recommending that we sell a quarter of our position in American Airlines (AAL).
The stock rallied 17% on Thursday on positive airline trend news, and the position is up nearly 30% since first being added to the portfolio in late October. Both American Airlines and its competitor, Southwest Airlines, provided bullish forecasts for the holiday travel season today, which was the catalyst for the latest show of strength across the broader airline industry.
Specifically, American disclosed that it raised its Q4 adjusted earnings forecast to a midpoint of 65 cents a share, up 30 cents from the previous forecast. This compares favorably to the consensus estimate for Q4 adjusted EPS of 39 cents.
After taking the partial profit, we’ll retain the remaining three-quarter position with a “hold” rating. SELL A QUARTER.
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