Mother Chip Back on the Ship

We thought just for an instant we could see the future
We thought for once we knew what really was important
--Til Tuesday

Started a position in Intel (INTC) this am. Stock has been getting sold hard since late summer, and then broke thru $20 on news that CEO Paul Otellini will be retiring in the spring. Naturally, analyst downgrades followed.

My history with Mother Chip stretches back to the tech bubble glory days, when INTC was my largest and most productive holding. Since then, the name has been back on my sheets more than a few times in more of a trading position. Must admit to a bit of sentimentality each time it does so.

INTC's market cap currently stands at about $96B. Although it used to be debt free, it still holds about $3B in net cash. In each of its last two fiscal years, the company generated over $10B in free cash flow - although achieving similar this FY may be a bit of a stretch. On an enterprise value to FCF basis, the stock seems decently valued. It also sports an attractive 4.6% yield.

The stock is now oversold on multiple time frames--although that doesn't mean is won't get more washed out. In fact, technicals suggest support below at $18ish and $16ish.

Should the stock reach those levels, I'll likely be a better buyer.

position in INTC