By Sy Harding, Street Smart Report

My top stock pick for 2013 is Intel Corp. (INTC), the largest microchip maker in the world, designing, developing and manufacturing microprocessors for the global market. Intel is the dominant force in the computer processor arena, having long-held the lead in new technology and chip performance.

The stock sold off sharply (declining 33% from its April high to a low in late November) in reaction to the company lowering guidance for the second half of 2012 on slowing global economies. We believe the sell-off was overdone.

Smaller rival AMD (AMD) very occasionally emerges as a potential threat only to see Intel leapfrog ahead again. And Intel was faulted for being slow to recognize the demand for smaller chips used in smartphones and tablets, an area currently dominated by ARM Holdings (ARMH).

But Intel is moving more aggressively into that area with its 'Atom' chips, and acquired Infineon's wireless connectivity chip business in 2011 to support that undertaking.

Intel has a strong balance sheet and cash flow that allows it to maintain an immense budget for R&D and the capital expenditures necessary to sustain its industry-leading manufacturing technologies, and a history of introducing new processor architectures every two years.

The company is in solid financial shape. At the current price the shares are selling at less than 10 times estimated 2013 earnings, and pay an annual dividend of 4.2%.

In our view, the stock is very oversold, and the stock will rebound nicely in 2013. Our upside target is $27. We suggest a 'mental' protective stop at $17.20.

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