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4 Value Stocks For Times Of Uncertainty

July 26
11:14 2022

Ahead of the Fed’s July rate hike, markets seem volatile. Given the viability of value investing during such times, quality value stocks Intel (INTC)Micron Technology (MU)AbbVie (ABBV), and Cisco Systems (CSCO) could be solid picks to navigate a volatile environment.

The Fed is yet to announce its next rate hike for July. Since inflation soared to a record 9.1% in June, another 75 bps rate hike seems imminent. Consequently, market volatility is rife, as is evident from the CBOE Volatility Index’s 35.7% year-to-date gains.

Amid such circumstances, value investing has a history of outperforming its growth counterparts. Over the past 40 years, a significant portion of value returns has come during rate hike periods.

Furthermore, Bank of America Corp’s (BAC) chief quant Savita Subramanian prefers value over growth, and the bank expects value stocks to outperform growth in the coming years.

Therefore, fundamentally sound value stocks Intel Corporation (INTC)Micron Technology, Inc. (MU)AbbVie Inc. (ABBV), and Cisco Systems, Inc. (CSCO) could be profitable investments amid the ongoing uncertainty.

Intel Corporation (INTC)

An industry leader, INTC designs, manufactures, and sells computer products and technologies worldwide. It operates through CCG; DCG; IOTG; Mobileye; NSG; PSG; and All Other segments. INTC creates world-changing technology to enable global progress.

On July 12, 2022, INTC launched the first set of its open-source AI reference kits, which were built in collaboration with Accenture plc (ACN). These kits are designed to make AI more accessible to organizations in the on-prem, cloud, and edge environments and are available on GitHub. The company is expected to release a series of open-source AI reference kits over the next year, which should bolster its revenues.

INTC’s Datacenter and AI segment revenue increased 22.1% year-over-year to $6.03 billion for the first quarter ended April 2, 2022. Its net income came in at $8.11 billion, up 141.4% year-over-year, while its EPS came in at $1.98, up 141.5% year-over-year.

INTC’s forward EV/S of 2.18x is 22.1% lower than the industry average of 2.80x. Its forward P/S of 2.23x is 22.5% lower than the industry average of 2.87x.

Analysts expect INTC’s revenue to grow 2.6% year-over-year to $76.43 billion in 2023. Its EPS is expected to grow 2% year-over-year to $3.49 in 2023. It has surpassed EPS estimates in each of the trailing four quarters. Over the past month, INTC has gained 7.6% to close the last trading session at $40.61.

INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in this proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

INTC has an A grade for Value and a B grade for Quality. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #24 out of 94 stocks. Click here to learn more about POWR Ratings.

Continue Reading at INO.com

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