Intel (INTC)

He likes tech stocks. It broke a downtrend recently. He thinks it is going to get at least back to the old highs. He will review it in the spring as it is a trade.

(Top Pick Nov 25/14, Down 4.07%) Chips are in everything. The September lows are much higher lows than in August. NVDA-N is his preference now in the semiconductor space.

It is a fine company with some fire power and there is a potential they could reinvent themselves, but now they are fighting the headwind of being a chip supplier to PCs in a smartphone age. He would go to AAPL-Q, GOOGL-Q, and FB-Q.

He likes this.

Good value here. Not his favourite tech stock. The stock has come down and has a nice dividend. Trades at a very low multiple. Thinks you would be fine with this, but would rather see you in other areas of technology. Dividend yield of 3.3%. (See Top Picks.)

Getting back to the process, looking back at leadership. Semi-conductors have been breaking down for a some time now. Whole sector is suffering. Intel is facing a really tough PC demand knock against them. It is a declining industry group in a struggling sector. Something he would stay away from.

Big semiconductor company. Primarily PC-based in the past and PCs are in a secular decline which has really hurt them. They didn’t really capture the whole mobile space. Has recently been down because of a downgrade by a big brokerage firm, which is seeing some negative momentum in the data centre business sector. With technology you want innovation and growth, so she would not be buying it here.

A good dividend paying company with growth prospects. He likes tech and thinks it will be an outperforming sector. He expects consistent, multi year increases in dividends. Get exposure to cooperate CapX expenditures.

Not an expensive stock, trades at 14x earnings. Moving out of PC business to the smart phone business which has been difficult for them.

If you look at the whole semiconductor sector, it really matches with the global growth themes. Global growth and chips really go hand-in-hand. Has come off a bit this year, but is kind of coming back to trend. It could get a little bit softer. As a safer entry point, he would like to see it at around $29. Thinks there is a 5%-7% risk from here. A little bit early to get in at this point, so just wait a few percents.

Thinks they will continue to struggle. The major product they are selling into is still the big mother load of computer chips for computers. Arm Holdings (ARMH-Q) have been eating their lunch. Computer sales are way down. It looked like they were making good inroads into the tablets and phone markets, but it turns out they were actually subsidizing a lot of those sales.

He likes big tech because it is a big cash flow generator and can be a big dividend grower. Their problem has been that they are so centric to PCs. They made an acquisition to help them with networking and data centers. Semiconductor companies are seeing strategic value in paying a premium to market. Private investors can buy at market value today yet acquirers are paying a premium. It is not quite as aggressive a position as some, but you make good money.

Made a very big acquisition of Altera, and thinks this is why the stock is under pressure. They have to flush out a little bit more and explain what they have done. A very interesting, but a very big acquisition. Feels the stock is going to be under probation for a while and will be going sideways for about 6 months.

His model price is $52.98, almost a 60% upside. The old techs are not being properly valued in this market. The fundamentals are there for this one to go significantly higher in the next little while. Dividend yield of 2.91%.

It is a bit of a laggard. He thinks it rallies from here and makes a new high. The sector is positive. It outperformed in 2014 and that was important, but now it is underperforming. If the index is going to go higher, then money has to go into this stock as it is a big component of the index.