Now that Gregg is here, we can finally call this an official QC thread.
I presume your comment regarding Qualcomm's 'full valuation' is an attempt to provoke debate rather than a carefully researched conclusion?!
Me, provoke debate? You obviously have not been reading this thread. Many think I PROVOKE, period. <ggg>
The following is what I said,
I opine that without some quantum leap, QC is fully valued as a handset, ASICs and royalty company. Not that it will not continue to reward investors, just that it will not be in the same magnitude as it did so far this year.
I don't think you have said anything in disagreement. In hind sight, it is very easy for us to say how UNDER VALUED QC was and investing in QC was a slam dunk. At current price, all I am saying that QC is no longer trading at a discount, but FULLY VALUED.
Everything you said is correct and had been discussed thoroughly in one form or another. That is indeed the handset, ASICs and royalty company that I am refering to. Lets take $4 as the FY2000 earnings. We are trading at 40 times earning.
Don't you consider that "fully valued"?
Don't forget when I say fully valued, it does not mean QC will no longer increase in value. Just think, if the PE remains at 40 and QC's earnings grow at 30% from FY to FY, the stock price is going to rise by 30% per year (you do the math), year after year, not bad by most standards.
Unfortunately, we are now spoiled by a 6.17 bagger for just under 7 months. I don't think even the most optimistic of the shareholders would expect another 6 bagger for the remainder of the year, or two years, or may be 3 years.
However, allow me to provoke, not debate, but thought. What is the new Qualcomm - 2-3 years from now? Is it the same handset, ASICs and royalties company or has it become the giant of the new paradigm, one that has broadband wireless as the backbone.
Everyone of us on SI is familiar with the internet. Just picture the new world a few years from now when we have wireless internet. I can think of a limitless number of applications, absolutely mind boggling limitless.
Now you can continue to crunch numbers, based on how many subscribers, how many handsets, x% royalties etc etc. In the end, you will find that QC will miss expectation one qtr or exceed another quarter. So the price will oscillate. All the cheerleaders who claim to be long term investors will once again go through the euphoria and depression cycles over 1/2% daily moves.
Is that why you invested in QCOM? Just for a 20%, 30% or 40% annualized return? Of course not. <ggg>
What I am thinking is this NEW QUALCOMM indeed has the potential to dominate an entire new industry that does not exist right now. When you guys were debating 3G last year, I never got too excited about the subject. Now I think I finally see the picture.
A new race is starting and I hope that QC is prepared.
Welcome to the thread but make sure you stay on topic and no more of this rah rah cheerleading stuff. <ggg>
Ramsey |
