Alan Abelson, Barrons, on Qualcomm:
What follows is not too cheery....HF
Like Albert, Fred Hickey, feisty proprietor of the High-Tech Strategist and valued member of Barron's Roundtable, has been resolutely bearish for quite a spell on the economy, on his special investment turf -- the techs -- and on the market as a whole. Fred's a tough hombre, and he has shrugged off his share of ragging by the abundant population of loud louts during that late and unlamented stretch when euphoria gripped Wall Street and spilled over into Main Street.
Rather than brood, Fred turned his unyielding negative stance to good use by buying puts and selling them, for the most part propitiously, all the while adding to his gold stake. Inevitably, Fred was much too early in his downbeat assessment of stocks like Research in Motion and Apple, and it cost him; but he doughtily kept both in his cross-hairs and has reaped the handsome rewards when the two erstwhile highfliers went down like a stone in this year's cataclysmic crash.
We chatted with Fred late last week, and he was resolute that we were on a collision course with a classic capitulation that might see a four-digit drop in the Dow -- which came perilously close on Thursday -- that would likely create a short-term market bottom that could hold at least for a few months.
As we spoke, and before the market turned tail and went completely over the edge, he admitted drawing a measure of comfort from his puts on, among other stocks, Amazon.com (ticker: AMZN), which he had described in his recent letter as "a retailer with a 50 P/E heading into the worst economic slowdown in decades," and whose two biggest markets are the U.S. and the U.K., with heavy exposure to Europe, all of which are struggling to cope with dangerously foundering economies. The weakness in the euro and the pound, moreover, could take a painful bite out of Amazon's earnings.
He's also down on Qualcomm (QCOM), whose customers are suppliers to the big wireless outfits, which, heavily laden with inventories, reportedly are asking for a slowdown in shipments. He suspects the company's guidance on operating results are at risk. An institutional favorite, Qualcomm shares could be ripe to become a target for a spate of aggressive selling.
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