One Of Our All-Time Favorite Holdings Is Still A Buy

Today we want to tell you about a stock that many of our subscribers are probably sick of hearing about.

That’s OK… because as long as this company remains a “no brainer” investment, we’ll continue singing its praises.

To put it simply, this stock has something for everyone.

It’s no wonder then, that three different StreetAuthority publications have recommended it over the years — and still do. While there are no guarantees in investing, when three StreetAuthority experts recommend a stock, it’s a good sign that you should pay attention.

Besides, it’s not like we’ve been beating the drum on this stock for years and it hasn’t done anything.

In fact, if you listened to StreetAuthority co-founder Paul Tracy when he first recommended this company back in 2011, you could be sitting on a total return of 102%. And the good news is we think there are still gains to be had.

The stock I’m referring to is $172 billion computer chip giant Intel Corporation (Nasdaq: INTC).

What’s remarkable about this company is that it’s been quietly doing everything right for years — yet up until a few months ago, many investors had written it off as a behemoth in a fading industry.

It wasn’t until last week when Intel absolutely crushed its second-quarter earnings announcement that the Wall Street crowd finally did a double-take.

In case you missed it, Intel reported $13.83 billion in revenue, an 8% increase over last year and earnings shot up $2.8 billion, a 39.8% increase over last year. Meanwhile, operating margins increased to 64.5% from 59.6%.

Not bad at all…

Even better, its Q3 forecast of $14.4 billion in revenue — which would be a 7% lift over last year — made investors happy, as well as the announcement of an additional $20 billion in share repurchases. (Intel has already repurchased $45 billion in shares since 2005.)

But the reality is this stock has been doing well for a while, up nearly 47% since last November alone. 

That incredible performance was more than enough to lead my colleague Austin Hatley to add shares of Intel to our Maximum Profit newsletter.

In Maximum Profit, Austin and his team look for stocks previously recommended within the StreetAuthority universe that also sport high levels of momentum. Specifically, the system is designed to identify stocks with a relative strength rating of 70 or above — meaning they are rising faster than 70% of the market. And to ensure the system is only picking rising stocks that are healthy companies, we also screen for stocks with strong cash flow growth.

At the time of Austin’s recommendation, Intel was sporting a traditional relative strength rating of 83, while also growing cash flow faster than 71% of the market.

But of course, Austin isn’t the only StreetAuthority analyst to be bullish on Intel.

Looking back to 2013, Amy Calistri recommended Intel in a March update to her Daily Paycheck subscribers.

Amy cited Intel’s “must have” semiconductors in the personal computer space as the primary reason for the company’s dominance, but was right to point out that PC demand had fallen off in the past few years.

Yet Amy saw Intel’s potential in developing markets while most investors were sour on the stock:

While the high-end mobile market dominates in developed countries, it is too expensive for the rest of the world — and that equates to a huge opportunity. Intel is starting to supply chips for the value end of the mobile market, which is the fastest growing mobile segment. In the past year, Intel has launched phones with Intel chips in Africa, Latin America, Russia, India and China. Most recently it announced that its processors will be used in Acer’s new smartphone, which will initially be sold in Thailand.

It is arguably a long road. But expectations for Intel’s turnaround are low, which should mitigate some of Intel’s downside risk. And any positive surprise should make this stock rejoice to the upside.

But like I mentioned before, Amy wasn’t the first analyst to spot the opportunity with Intel. We originally recommended this stock in our flagship newsletter, Top 10 Stocks, back in 2011.

It was simply too good to pass up.

At the time Intel sold-off with the overall market, but it was a company that consistently created shareholder value… even though its share price had been relatively stagnant for years.

That fooled many investors into thinking Intel was a boring, stodgy stock whose best days were behind it… but that couldn’t have been further from the truth.

Regular readers know that when we look for world dominating stocks worth holding forever, they must have the following characteristics…

– They enjoy huge (and lasting) market advantages over the competition.

– They pay their investors each and every year by dishing out fat dividends.

– They buy back massive amounts of their own stock.

Intel fit the bill perfectly.

It held over 70% market share in the multi-billion dollar semiconductor market. It was increasing its dividend at an average rate of 16% a year… not to mention it paid a healthy dividend of 4.2%. And it bought back nearly $7.5 billion of shares in the first three quarters of 2011.
 
This is exactly what we liked about Intel when we first recommended it. Readers who bought shares back then are now sitting on a total return of 102%… and we think there are more gains ahead.

It’s clear Intel has been the poster child for many of StreetAuthority’s analysts. But at the end of the day, it all comes back to the things Intel does best — and why we think you could practically own this stock “forever.”

That’s not to say this stock can’t go down. But if it does, chances are, we’ll pound the table on Intel again. After all, when you own a company that dominates its market and consistently rewards shareholders, you’ll likely want to own it for a long, long time.

But Intel isn’t the only stock we think is worth owning forever. In fact, we’ve identified 10 other stocks like Intel — stocks that dig a wide moat around their business and then shower shareholders with dividends and buybacks. To learn how to get the full list of Forever stocks, including names and ticker symbols, visit this link.