Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 168.09

+1.8%

Nov 28 9:30 AM EST

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To: Ruffian who wrote (84297)	10/20/2000 8:45:21 PM
From: Ibexx	Read Replies (1) of 152472

A research paper issued on 10/20 by Pete Peterson et al. of Prudential Volpe. Warning: very long but thorough. (Article somewhat abbreviated due to length but not edited.) (415) 274-7983 pete_peterson@pruvolpe.com PART I Summary: A closer look at our earnings model for QUALCOMM supports our strong buy rating * Shares of QCOM have seen significant near-term upside recently as news flow from China indicates progress for CDMA. * We are breaking out all of the assumptions in our multi-variable model in order to highlight that QUALCOMM should see upside over the next 12 months. * Based on our assumptions we believe QUALCOMM should see a 5-year EPS CAGR of approximately 40%. * The company currently trades at 75 x our forward four quarters EPS estimate of $1.03 yielding a P/E to growth (PEG) ratio of 1.9, a ratio we believe is too low for a high-growth name with strong proprietary technology. * QUALCOMM is in the enviable position of winning either way when carriers make their 3G technology decision between CDMA2000 and W-CDMA. * The company's planned spin-off of its chipset business could further unlock value for shareholders. * According, we reiterate our Strong Buy rating on shares of QCOM. We are detailing our model to illustrate the EPS growth opportunities ....The stock has seen pressure over the first half of this year owing to extreme valuations, setbacks in the Korean market in relation to handset subsidies, and the delay in CDMA implementation in China. There is a great deal of discordance in the marketplace over QUALCOMM but we believe that our model justifies our Strong Buy rating and are detailing each of these assumptions inn our model. We believe that when viewed in its entirely, QUALCOMM's story is still compelling and warrants a Strong Buy rating at these levels. (To be continued....) Ibexx

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