ClearBridge Investments, an investment management firm, published its “Dividend Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. The ClearBridge Dividend Strategy outperformed its S&P 500 Index benchmark during the first quarter. On an absolute basis, the Strategy had gains in three of 11 sectors in which it was invested for the quarter. The main contributors to Strategy performance were the energy, industrials, and utility sectors. The materials, IT, and consumer discretionary sectors, meanwhile, were the main detractors. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, ClearBridge Investments Dividend Strategy mentioned Intel Corporation (NASDAQ:INTC) and explained its insights for the company. Founded in 1968, Intel Corporation (NASDAQ:INTC) is a Santa Clara, California-based multinational corporation and technology company with a $186.7 billion market capitalization. Intel Corporation (NASDAQ:INTC) delivered a -11.32% return since the beginning of the year, while its 12-month returns are down by -29.76%. The stock closed at $45.67 per share on April 14, 2022.
Here is what ClearBridge Investments Dividend Strategy has to say about Intel Corporation (NASDAQ:INTC) in its Q1 2022 investor letter:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. We initiated a position in Intel (NASDAQ:INTC).
Over the last year, Pat Gelsinger, Intel’s new CEO, has devised a bold and aggressive strategy shift for the company. Gelsinger wants to open Intel’s factories to manufacture chips for competitors and thereby increase the utilization of Intel’s machinery. Doing so could increase the company’s returns and profits and bolster its competitive moat. While we admired these moves and saw their potential merit, we sat on the sidelines.
Intel’s repositioning requires tens of billions of dollars of increased investment and entails more risk than we are usually comfortable with. Russia’s invasion of Ukraine, however, changed our calculus. It revealed the fragility of the international order and drove home the importance of local manufacturing for critical industries like semiconductors.
Over several decades Taiwan has become the leading source for cutting-edge computer chips. With China determined to control Taiwan, this poses a critical strategic risk for the U.S. and the West. Concern over this threat has simmered for years but the war in Ukraine marks a boiling point. Indeed, just two weeks after Russia invaded Ukraine, Germany offered Intel over €5 billion in subsidies to build a plant in-country. We expect the U.S. will soon do the same. As Intel embarks on this new course, there is significant, long-term upside potential for the shares. This strategy entails meaningful risks, but at the $45 price we paid for our shares, we believe the risk/reward was asymmetrically skewed in our favor.”
Photo by Slejven Djurakovic on Unsplash
Our calculations show that Intel Corporation (NASDAQ:INTC) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Intel Corporation (NASDAQ:INTC) was in 72 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 66 funds in the previous quarter. Intel Corporation (NASDAQ:INTC) delivered a -16.87% return in the past 3 months.
In April 2022, we published an article that includes Intel Corporation (NASDAQ:INTC) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
