Qualcomm Moderated Thread - please read rules before posting Message Board

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

QCOM 170.90

-1.3%

Nov 7 9:30 AM EST

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To: bruce_hamilton who wrote (13375)	7/27/2001 12:34:18 PM
From: Stu R	of 196558

I will agree with you that the value of intangibles is very important in assessing value for any company. That was proven in 1998-2000 however, in the case of QUALCOMM one must place a value on the patent portfolio. By definition, patents are intangible assets. QCOMs tangible book value per share is approx. $6 per share. With a current market value of approx. $64 per share, the market is placing a value of $58 on Qs intangibles including patents. Without Qs patents what would the company be worth? It is hard to speculate since without the patents and Qs efforts there would be no CDMA and no company to speak of. I think it is safe to say that the vast majority of the value of Qs intangibles is its patents or said another way, as a result of its patents. The $58 of goodwill value that the market is placing on Q is directly related to the perception and expectation of future profits and cash flows. It is the uncertainty of what those future profits and cash flows will be that makes the value of the company's goodwill, including its patents, intangible. Like Art, I like to look at a price/ book value ratio as one tool among many in looking at a company's valuation. It certainly is only a tool and in most cases is of limited value in the overall. Unlike Art, I like to look at price/tangible book that removes goodwill and intangibles from the balance sheet before making the calculation. This gives a more accurate reflection of the value of 'real' (hard or tangible) assets versus the amount that the market is assigning to goodwill (soft or intangible). I believe this method gives a more accurate and consistent basis for analysis. Just look at what is happening with JDSU as a good example of this. BTW, I calculated the price/tangible book of Coke at 20x and of 3M at 7x. Stu

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