A great buy of a tech giant for your retirement

People are usually hype about new tech companies' stocks and have no passion at all about matured tech companies such as Microsoft and Intel. Actually exactly those less liked matured companies with a great track record of paying increasing dividends over time will make you rich, if you are patient enough by buying them at good price and holding them forever with dividends reinvested. Intel (INTC) is just such kind of a company. In the past year or so, people have run away from INTC, thinking that this giant is near its dead end. Its price has declined over 20% or so. At this price, INTC is very cheap in valuation and paying a salivating dividend of 4.2%. Right now, actually INTC is a great buy. Why so?

A few days ago, Intel reported disappointed earnings for the first quarter. Its core business, PC chips which are counted for almost half of the company's sales, was down 6%. This was consistent with the recent news that PC shipments worldwide declined 14% in the first quarter vs last year, worse than what analysts had predicted. As a result, Intel's sales dropped 2.5% and net income fell 25%.  Normally you would expect that a company's stock would be slaughtered when reporting earnings poorer than expected. But not this time for Intel. More amazingly, while the overall market was doing poorly in the past week, Intel was one of very few companies doing quite well and its share price showing a clear uptrend (see below: upper: INTC vs S&P500 past 5 days; lower: INTC 52 week chart).

When a company's stock is doing well with bad news, especially in a poor overall market, it is telling you that selling of the stock has been exhausted and it is the time to buy.