Stocks pairs trading: F vs INTC
Let's examine the trade potential for Ford (F) and Intel (INTC) by analyzing their key financial metrics and recent performance to determine reasons for going long on Ford and short on Intel.
Price-to-Earnings (P/E) Ratio:
Ford (F): P/E ratio of 13.34
Intel (INTC): P/E ratio of 35.18
Ford’s P/E ratio is significantly lower than Intel's, indicating that Ford is potentially undervalued compared to Intel. This makes Ford a more attractive investment from a valuation standpoint.
Profitability Metrics:
Ford (F): ROA of 1.48%, ROE of 9.20%
Intel (INTC): ROA of 2.15%, ROE of 3.99%
Ford’s return on equity is substantially higher than Intel’s, suggesting Ford is more effective at generating profit from its shareholders' equity.
Performance Metrics:
Ford (F): Perf Year of -12.36%, Perf YTD of 7.70%
Intel (INTC): Perf Year of 5.64%, Perf YTD of -32.79%
Ford has shown a positive year-to-date performance, while Intel has struggled significantly this year. This trend reflects Ford’s recovery and growth prospects, particularly with its recent earnings beating expectations and a promising outlook for 2024.
Decision:
Long on 3 Ford (F)
Short on 1 Intel (INTC)
Price-to-Earnings (P/E) Ratio:
Ford (F): P/E ratio of 13.34
Intel (INTC): P/E ratio of 35.18
Ford’s P/E ratio is significantly lower than Intel's, indicating that Ford is potentially undervalued compared to Intel. This makes Ford a more attractive investment from a valuation standpoint.
Profitability Metrics:
Ford (F): ROA of 1.48%, ROE of 9.20%
Intel (INTC): ROA of 2.15%, ROE of 3.99%
Ford’s return on equity is substantially higher than Intel’s, suggesting Ford is more effective at generating profit from its shareholders' equity.
Performance Metrics:
Ford (F): Perf Year of -12.36%, Perf YTD of 7.70%
Intel (INTC): Perf Year of 5.64%, Perf YTD of -32.79%
Ford has shown a positive year-to-date performance, while Intel has struggled significantly this year. This trend reflects Ford’s recovery and growth prospects, particularly with its recent earnings beating expectations and a promising outlook for 2024.
Decision:
Long on 3 Ford (F)
Short on 1 Intel (INTC)
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