Qualcomm Moderated Thread - please read rules before posting Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 177.78

-2.2%

Jan 9 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: qinvestor	4/22/2010 3:56:34 PM
	3 Recommendations Read Replies (2) of 197147

QCOM VALUATION??? Thoughts... QCOM has decaying margins in its core businesses... The QCT business is being cannabalized by smaller players that cherry- pick markets, ie (Southwest), while QCT tries provide chips to be everything to everyone. QTL is losing ground as QC needs IPR from other players for advanced technologies (4G). QC's investments / ventures continue to live off the earnings from the core business and the net effect are negative impacts to earnings. So what is QC worth... Well 3G is peaking... 3G is near the top of the S curve now and core margins are under pressure. From a fundamental standpoint, I'd say less than a 10-12 PE given the growth rates in the 3G markets are slowing and there are increasing margin pressures in QC's core businesses and few apparent avenues to grow the core business. $2+ earnings * 10 PE = $20-$25... OK - They have a lot of cash... Let's say they have $10-$12 in cash. Well given the Wall Street mentality, as pressures increase, I don't think it is a stretch to assume that the QC's BOD and Management will pursue a high risk / reward strategy with shareholder money. Why not, from their point of view its a "heads I win, tails you lose" strategy. So the probability of this $10-$12 ending up in shareholder's hands is low, and therefore it should be heavily discounted. I say QC is worth between $25-$30 tops from a fundamental standpoint at this time. I say fundamental because the markets don't always make sense in the short run. Maybe my valuation is too conservative, but I would think it is hard to argue the stock is worth more than $35...

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next