True. Investors who "bought the story" in 1999 or before, and have held, have done extremely well. I looked at the company then, and couldn't convince myself that it was certain QCOM would continue to own CDMA IP, and that CDMA would become the global standard within a reasonable time-frame. I needed more certainty, and missed that opportunity. By the time I had that certainty, the valuations scared me.
This stock has been in a downtrend since the January 2000 high. You can draw a line along the tops since then (using a log chart). IMO, that downtrend is not over, which is why I'm out. When I bought last year, I did not anticipate the credit crunch in telecom, and the possibility of a recession in 2001 or 2002. Those new factors make QCOM in the 60s overvalued.
The Story on QCOM is more solid now than it was last year. Qualcomm will eventually make a lot of profits. The problem is that "eventually" seems to be receding further into the future. Not because of what Qualcomm is doing, but because of macro trends and sector trends.
I intend on being back in this stock, sometime this year or next. I haven't set a price target, and I probably won't for a while. Somewhere in the 40s or below. And, if the stock doesn't go there, that's OK. There are a lot of quality techs at reasonable valuations now. |
