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 176.47

+2.4%

9:32 AM EST

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To: slacker711 who wrote (21977)	4/29/2002 6:45:12 PM
From: Andrew N. Cothran	Read Replies (2) of 196984

In my opinion, the use of a portion of excess cash to invest in so-called junk bonds is a good move. The bonds are usually at a discount to face value and have a higher interest cupon than the so-called "blue chip" bonds. By diversifying, one can realize a safe return that is several points higher than the non-junk category. By retaining the bonds to maturity, one can also realize a capital gain as the price paid for the bond rises to the face value of the bond. QCOM should see its investment income increase significantly through the use of junk bonds. As investment income increases, reportable earnings on the common stock also increase. As earnings increase, the price of the stock should rise accordingly. QCOM would do well to reserve a part of its cash largesse to repurchase some of its shares in the open market. This action, combined with that of increasing earnings on the common, should put a floor under the common stock price! And the common stock price could certainly use a FLOOR. I hope that today's close was the floor.

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