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Shareholders in Intel (NASDAQ:INTC) have lost 63%, as stock drops 4.0% this past week


Shareholders in Intel (NASDAQ:INTC) have lost 63%, as stock drops 4.0% this past week

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Intel Corporation (NASDAQ:INTC) share price dropped 68% over five years. That's not a lot of fun for true believers. And it's not just long term holders hurting, because the stock is down 59% in the last year. More recently, the share price has dropped a further 19% in a month.

After losing 4.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Intel

Intel isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over half a decade Intel reduced its trailing twelve month revenue by 8.2% for each year. While far from catastrophic that is not good. With neither profit nor revenue growth, the loss of 11% per year doesn't really surprise us. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Not that many investors like to invest in companies that are losing money and not growing revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Intel in this interactive graph of future profit estimates.

We'd be remiss not to mention the difference between Intel's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Intel shareholders, and that cash payout explains why its total shareholder loss of 63%, over the last 5 years, isn't as bad as the share price return.

Intel shareholders are down 59% for the year, but the market itself is up 25%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Intel you should know about.

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