Insider trades can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting insider buying at Intel Corp (INTC:US). Intel is the world's largest semiconductor manufacturer by revenue. Previously a PC-centric company, it now offers products for a broad range of high-growth markets including cloud computing, AI, and 5G. The company is listed on the Nasdaq and currently has a market capitalization of approximately $122.44 billion.
Insider Buying at Intel
2iQ data shows that between November 4 and November 16, Intel board member Lip-Bu Tan purchased 100,000 INTC shares at an average price of $28.73 per share. This trading activity cost the insider just under $2.87 million. These are the initial transactions of the insider after joining Intel Corp.
Mr. Tan has considerable experience in the semiconductor space. Currently, he is Executive Chairman of Cadence Design Systems, a computational software company that provides solutions to design and develop complex semiconductor chips and electronic systems. Previously, he served as CEO at Cadence between 2009 and 2021.
He also has experience in the investment space. Currently, he is Chairman of Walden International, a VC firm he founded in 1987, as well as Founding Managing Partner of VC firm Celesta Capital.
Given his background, he is likely to have a good understanding of Intel’s long-term investment potential.
Close to the Bottom
Intel is experiencing a few challenges right now due to the slow down in the semiconductor industry. This is illustrated by the fact that last month, it cut its 2022 revenue forecast for the second time this year. It now expects full-year revenue of $63 billion to $64 billion, versus previous guidance of $65 billion to $68 billion.
Yet with the stock down more than 50% since April, and currently trading on a P/E ratio of less than 15, this may already be priced in.
It’s worth noting that Intel stock has started to rebound lately. It seems that planned cost cuts ($3 billion in 2023 and $8 to $10 billion by the end of 2025), announced in the group’s Q3 results, have been received well by investors. On the back of these planned cost cuts, analysts at Barclays upgraded the stock to ‘equal-weight’, stating that a “bottom is in sight”.
In light of the fact that the stock has fallen significantly this year, we see the insider buying here as a bullish development.