The New Qualcomm - a S&P500 company Message Board

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Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 165.03

+1.0%

Nov 24 3:59 PM EST

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To: Mike Buckley who wrote (1295)	9/6/1999 10:42:00 AM
From: Keith Feral	Read Replies (2) of 13582

Mike: I don't really try to get in the way of the numbers. The sale of infra clearly changed the valuation model for QCOM, permanently. It was the best piece of financial engineering I have ever witnessed. With a 40% EPS upside in the last fiscal quarter, the company is showing impressive margin expansion. Bottom line, mgmt has made all the right moves. As revenue growth begins to gain momentum with the increase in handset production (especially in the December quarter), the only thing I can see coming our way is more stock splits and big EPS surprises. I think the reveleance of my "current" PEG ratio shows that QCOM is just as cheap as it was a year ago. Going forward, I am more than happy with 40% or 50% growth, as it will reduce my cost base to almost nil over the next couple of years. Using a 40% growth rate, the "forward" PEG is 1. I think you could agree that is very cheap, too.

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