After endless months of waiting, it looks like the market finally is beginning to favor turnaround stocks! One I like is Intel Corp. (INTC), which remains a “Buy” in the portfolio, writes Clif Droke, editor of Cabot Turnaround Letter.
With the momentum trade being the dominant theme on Wall Street for much of this year, a rotation out of trendy growth stocks and into lagging, underappreciated names is now apparently underway. Of course, this was bound to happen at some point as the bromide “every dog has his day” definitely applies where the market is concerned.
Given that the white-hot segments of the market like info tech, industrials, financials and utilities are among the S&P 500 index sectors closest to their respective all-time highs, it makes sense from a contrarian perspective that the groups furthest from their highs are now becoming more favored. These include some of the sectors we’ve been emphasizing in recent months, including energy, healthcare and consumer discretionary.
Intel Corp. (INTC)
Regardless, it’s gratifying to finally have our patience rewarded in what has largely been a sluggish environment for turnarounds. As for INTC, according to The Oregonian newspaper, it plans to reduce its workforce in Oregon by 529 employees. It was reported in April that Intel planned to reduce its global workforce by 20,000, or 20%.
Recommended Action: Buy INTC.
