Since we're already in 2002, why are you using 2000 numbers to compare two companies? Investors are currently pricing the stocks based on trailing 12-month (and guesses of forward 12-month) performance. Some are basing their stock valuations on 2003 expectations, throwing out 2002 and 2001 as trough years. 2000 is ancient history. Even more important, 2000 and 1999 are anomalous history, like 1927 and 1928. Not likely we'll see years like that again, for a loooooooooonnnnnnng time.
In calendar year 2001, QCOM reported earnings of -0.04$/share. Notice the negative sign. That's the summation of the good parts of the business (licenses and chips), and the bad parts of the business (Strategic Misadventures). The Strategic Misadventure Division, is a core part of their business plan, and the pattern of losses has been the opposite of "one-time".
Further, since the telecom services companies are retrenching, cutting capex budgets, seeing their credit ratings cut, having increasing problems refinancing their debts, and cannot possibly fund the 3G buildout out of their cash flows, you are not going to see 75% EPS growth rates for QCOM, not in 2002, or 2003. Maybe 2004. But that's so far in the future, investor's will pay nothing for it today.
At a price below 40, IMO, investors are seeing no wireless data tornado in QCOM's future. Or seeing it so far away, in an uncertain future, that it is over the (investing) horizon. Which presents opportunity, for those who think there is such a future for QCOM.
My next buy point is at 30. Then I unload the lots I bought at 40 and 35, the next time investors get (briefly) hopeful. |
