Intel Corp’s. (INTC) stock has been hammered since the beginning of June, falling by more than 20 percent from its highs. It shouldn’t come as a surprise that hedge funds and institutions were dumping the stock during the second quarter.
The stock’s decline started when it was announced the company’s CEO was resigning due to an improper relationship with an employee. Three months later, the company is still searching for a replacement, and it has weighed on shares of the chip maker.
Of the 100 companies the WhaleWisdom heatmap tracks, Intel fell to number 96 in the second quarter, down from number 41 in the first quarter. Institutions and hedge funds were dumping the stock, pushing the stock lower.
Hedge Fund’s Dump Shares
During the quarter the number of shares held by hedge funds dropped by more than 4 percent to 158 million total 13F shares. The number of shares held by institutions fell as well, by 2 percent to 3.1 billion. In total 93 hedge funds and 864 institutions, added to or created new positions in the stock. Meanwhile, 103 hedge funds and 1,153 institutions closed or reduce their holdings.
The steep sell-off comes as a surprise in some regards. The company delivered strong second-quarter results, with earnings topping estimates by 7 percent, while revenue beat estimates by 1 percent. Additionally, analysts have increased their forecasts for the third quarter and the balance of the year.
Over the past three months, analysts have raised their third-quarter earnings estimates by more than 10 percent to $1.15 per share. Meanwhile, revenue estimates have increased by more than 4 percent to $18.1 billion. Earnings for the quarter are now estimated to grow by more than 13 percent versus last year, while revenue is forecast to increase by 12 percent.
The outlook for the full-year is even stronger. Earnings are forecast to grow by more than 20 percent, up from previous estimates for growth of only 11 percent in the middle of May. Meanwhile, revenue is now expected to grow almost 11 percent, better than earlier forecasts for an increase of only 8 percent.
The robust business outlook was hurt when the company said in July it would delay the release of its 10-nanometer chip until late 2019. The chip was supposed to be ready by the end of 2018.
Although the business outlook for the stock looks strong, there is no doubt some institutions fear a delay in the 10nm chip may cause Intel’s business to slip in coming years.