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Bryan Tan asked 4 weeks ago

Hi all,
Recently Intel’s earning came out and the stock price fell appox 12% during the first day of trading after earning release.
But the earnings came out to be of an increasing revenue trend but margins and market share are dropping.
How do you determine if the stocks are a value trapped because the valuation of Intel looks very attractive at the moment. 

1 Answers
Victor Chng answered 4 weeks ago

Hi Bryan,
 
It is a value trap when you can expect the market share to drop further. As for Intel’s case, computer used to rely heavy on their chips but with Apple recently creating their own processor, it shows that Intel can be disrupted. 
 
Moreover, consumers are shifting towards more mobile phones which I don;t Intel’s chips is in right now. 

Victor Chng replied 4 weeks ago

In summary, just look for disruptive trend that may affect the company. If there is, even cheap valuation can be expensive.