Intel Stock Moves Lower Despite Third Point Collaboration

The equity carries an over 18% year-to-date deficit

Digital Content Manager
Dec 30, 2020 at 10:58 AM
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The shares of Intel Corporation (NASDAQ:INTC) are down 1.5% at $48.65 at last check, after the tech name said it would work with Third Point on business changes that may increase shareholder value. The hedge fund recently sent a letter to Intel, in which it said the company should evaluate outsourcing its manufacturing operations to remain competitive. Intel has been falling behind the competition, with its chips currently being phased out by Apple (AAPL).

Digging deeper, the equity has had a rough run on the charts. In June, shares rallied to the $65 level from a March low near the $43 mark. However, two major bear gaps in July and October brought the security back down to those levels, for an Oct. 30, annual low of $43.61. Plus, the 140-day moving average is keeping a tight lid on gains, and INTC sports a 18.2% year-to-date deficit.

Analysts are pessimistic toward the security, with 19 of the 26 in question carrying a tepid "hold" or worse rating, while the remaining seven consider the stock a "strong buy." Meanwhile, the stock's 12-month consensus price target of $52.05 is a 6.4% premium to current levels. 

That bearish sentiment is echoed in the options pits, where puts have been increasing in popularity. This is per the security's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 71% of readings from the past year. In other words, there is a healthier-than-usual appetite for long puts of late.

Now seems like an opportune time to weigh in on INTC's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 33% sits in the relatively low 15th percentile of its annual range. In other words, the equity sports attractively priced premiums at the moment. 


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