| | Bradley, not yet in the value range.
In fact, by my math QCOM could fill the gap at $20 and still not be a "value play".
First, their FCF is not $1.50 per share. It's $0.98
From most recent 10Q, FCF in the quarter was 189 M$ @ 4x = 756/yr on 767 M shares.
$1/$32.5 gives an effective yield of 3.07%
Compare this to MO (for example). Most recent 10-Q gives 9 months FCF of 6,901 M$ on shares of 2,166 M. Gives 9,201 M$ / 2,166 = 4.24 FCFps for yield of 8.16% at $52 (which it hasn't hit yet).
Qualcomm could fill the gap at $22 [EDIT: gap at $18-21] and still not be a "value" play here based purely on Price/FCF ratios.
But what has had me off the stock is the fact that the company's barely profitable.
For according to their own filings with the SEC, in its entire life as a public company it has:
(a) attracted 4.862 B$ in equity financing,
(b) accumulated only 0.384 B$ in profits earned net of boondoggles
(c) lost another (0.185) B$ in unrealized losses
Given that it started out with 4.862 B$ in shareholder contribution, the fact that it is sitting on 2.742 in cash and marketable securities is hardly impressive. Shareholders should instead be asking where the other 2.120 B$ have gone instead of marvelling at the "lack of debt".
These are the fundamentals that underpin the business from a dollars and cents perspective.
Which does not mean that the fundamental technology is inferior or otherwise encumbered. It just means that they are not monetizing the technology to the degree necessary to support the stock price.
And there are indications that doing so may be difficult, at least for the forseeable future.
For what it's worth.
John |
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