Buying a great company sounds easy in theory. But over time, a company’s fortunes can ebb and flow. That also leads to big changes in valuations. Investors who target an up-and-coming company that still trades like a value stock can potentially see great returns.
That’s especially true for a company that can tap into one of today’s many high-growth trends. Combining high growth with a reasonable value is a recipe for finding great stocks to buy and hold.
One up-and-coming player in the tech space is Intel (INTC).
The former leader in the semiconductor space, they’ve lost ground in recent years. But now with new server-related processors designed to handle AI, they’re coming up again.
Shares are up 64 percent over the past year, and are up nearly double from their bottom. That’s even as the company has struggled like many of its peers this year, with revenues off 8 percent and earnings down over 70 percent.
Action to take: Intel is in the early stages of its AI server chip growth. It likely has far more upside potential in the years ahead, as it is starting to see the benefits of being in that niche. Today’s buyers can also get a 1.1 percent dividend.
For traders, the March 2024 $50 calls, last going for about $1.45, could see mid-to-high double-digit returns on a further rally in shares into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.