John, in your post to me of 12/11 you wrote- >>> “You are avoiding the question with rhetoric. And, Now how about answering it: you say PE now is 35. You say it will increase to 64. Why?.”<<<
John, I believe that has been answered over and over in my prior posts. But, I’ll try one more time, as not only have you revealed your “reading comprehension” difficulties but also your inability to apply reason (think logically)
1. Qualcomm has a PE of 35 with an “analyst” consensus long term growth rate of about 22 (last time I looked) (the highs were 35%, the lows were 15%), which yields a current PEG of 1.6. A PEG of 1.6 is probably reasonable in this market environment. The last time I looked CSCO, MSFT, INTC, & DELL had PEGs ranging from 1.2 to 1.9.
2. You’ve probably already noticed (being an astute and avid Qualcomm follower) that Qualcomm is considered by some to be the “Rodney Dangerfield” in wireless investments as it’s not widely respected by the financial media and some “analysts”. Some (many maybe) analysts are viewing Qualcomm as well as the market in general with extreme skepticism, as some were viewing the market with extreme optimism in the late ‘90s. Analysts are under extreme scrutiny now and as such I believe are being overly cautious in their forecasts regarding Qualcomm. Some could still be supporting their hedge fund clients with their negative “analysis”.
3. Again, I believe I already stated in my 11/28 post and subsequent posts to you that I believe that Qualcomm is at the beginning of the 3G wireless Technology Adoption Life Cycle (TALC) and that within the next 7 to 10 years virtually all wireless carriers will be employing some form of CDMA. I provided a number of assumptions in that 11/28 post which yielded a CDMA subscriber total of 1.078B of the worlds projected 2.0B wireless subs in 2007. Again, in order to reach that 1.078B total in 2007 from the current CDMA sub total of about 140M requires a CAGR of 50%.
4. Again, in my 12/07 post to you a provided my detailed list of assumptions on how I arrived at a long term earnings growth rate of 35%, discounting the handset growth rate of 50% to compensate for ASP declines and share increases due to option grants. I further stated the 35% earnings growth figure might be low if the ramp in chipset volumes results in higher net margin rates, share buy-backs could off-set option grants, and R&D expenditures could decrease as the engineering staff retires ( becomes wealthy and takes early retirement). I also stated that this assessment was based on current business operations (basically handset sales) and excluded new revenue sources (BREW , etc).
At this point I don’t know what more I can do the satisfy your repeated questions that have been answered in detail many times over, other that to suggest that perhaps you should-
1. Take a week off, go to some secluded environment without outside disturbances, and re-read everything I’ve and others on this and other SI Qualcomm threads have posted over the last several months.
2. Enroll in a remedial reading course.
3. Seek professional help for your short/long term memory loss problem.
This will be my last post to you as I feel any additional discussion with you on this or any other topic would simply be a waste of my time.
Good luck- Jim |
