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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: StockOperator who wrote (37234)6/21/2002 11:38:17 AM
From: Caxton Rhodes  Read Replies (1) of 52237
 
Those gaps we caused by significant changes in QCOM's business. QCOM dumped their infra and phone divisions (which were money losers). Additionally QCOM won patent lawsuits in Korea, Japan, and Europe. I think those gaps are totally irrelevant.

I'm not particularly bullish on QCOM but after following the company for almost 9 years, I am certain that their CDMA technology is significant better than the competing GSM/TDMA in cost, spectral efficiency, and data capability. QCOM will be interesting to watch over the next year, as their 1X technology is launched by PCS and VZ.

QCOM has tanked because earnings expectations have dropped significantly, not because CDMA isn't the best mobile wireless tech out there, but because their has not been a rush for non cdma carriers to switch and WCDMA has been delayed for at least 2-3 years, and of course saturation in the developed wireless markets.

The question is not whether CDMA is a better technology, but whether it will be enough to make a difference to consumers and the revenues of carriers. If it does make a difference, carrier strategy may change rapidly.

In short, I'd be a very cautious short. And may consider a sizable long position if there is a NAZ crash in the coming weeks/months.

I find it hard to believe that QCOM will trade below a P/E of 15 ever (yes I use proforma ;) )

Not pumping QCOM at all, this is my shot at being objective. I am not long QCOM at this time

Caxton
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