Video

#SaxoStrats
Saxo Bank’s head of FX strategy John Hardy takes a closer look at how global currencies are being affected by developments in the US - China trade war.
Article / 23 November 2015 at 14:00 GMT

Alpha Picks: Intel shares to rise in 2016 as growth story unfolds

Head of Equity Strategy / Saxo Bank
Denmark
  • Data centre business looks very promising
  • Core PC segment seen improving in 2016
  • Attractions include high ROIC and low valuation

By Peter Garnry

Intel remains one of our top alpha picks in the mega cap segment. Last week, the shares were the best performing in the segment up 8% w/w. After being down as much as 27% by late August the rally since has pushed the year-to-date performance back up to only -2%

The stock remains a top alpha pick driven by still high ROIC (~19%) and very low valuation (EV/EBITDA 6.9x). Investor sentiment has recently changed as a positive future story about 15% expected long-term growth in its data centre business in addition to a more positive outlook for the core PC segment in 2016.

Intel weekly share price since 2011
Intel share price

Source: Saxo Bank. Create your own charts with SaxoTrader click here to learn more


Despite the recent rally, the shares have more upside as the growth story in data centers stimulates more positive investor sentiment as we move into 2016. Assuming 4.5% revenue growth in 2016 (consensus estimates) and expanding margins the valuation should be much higher.

– Edited by Clare MacCarthy

Peter Garnry is head of equity strategy at Saxo Bank

____________________________________________________________________________

Webinar

Download document

Alpha Picks - 2015-11-23

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail