Live through enough market corrections, and you eventually learn that the stocks that lose the least during a meltdown are usually the ones that perform the best once things improve. This is especially the case when the correction is not your garden-variety pullback, but a more structural retracement. Like now.
Unsurprisingly, the decline in the stock market has ravaged trendy tech names like Google ($GOOG), Twitter ($TWTR), and Tesla ($TSLA). And equally unsurprisingly, these are among the most popular stocks on Vetr.com, which counts a fairly young and tech-savvy audience among its growing user base.
Intel ($INTC), on the other hand, has displayed tremendous relative strength. For a tech stock, Intel has certainly lost a lot of its prior sizzle; it is rarely afforded a growth-stock multiple these days, and has little of the sex appeal of more modern technology enterprises. And If Vetr.com users are any guide, investors don’t have Intel on their radar; the stock has only 14 followers on our platform, and is rated 2.5 stars (sell) across 15 ratings despite being one of 2014’s top-performing technology stocks.
Yet unloved and unfollowed Intel barely budged over the past four weeks while the broader market cratered. It is up just shy of 5% over the past three months, more than four times the S&P 500’s 0.92% gain, and it’s been a veritable rock compared to Google (-9.5%), Tesla (-18.5%) and Twitter (-24.5%) over the same period.
Keep your eye on $INTC. In my experience, stocks, especially widely-held ones, that show strong relative strength during an ugly correction are the very ones to watch going forward. As hard as it is to stomach the volatility, astute investors learn to use periods like this to uncover the companies that will lead the next upturn. Right now, $INTC is an odds-on favorite to be one of those stocks.