There was another interesting two page feature article in Barrons this weekend that some of you may have seen titled "America for Sale: Price Reduced".
The focus of the article was companies with depressed stock prices, reduced P/E's, zero debt, tons of cash, strong market positions, and able to make bargain-basement acquisitions.
Here's the lead part of the table from that article titled "Big Cash Rich Companies". As you might guess, Qualcomm is not even mentioned in the article or listed in the table, so I've inserted QCOM with the same metrics as the Barrons author Andrew Barry used:
EVERYTHING MUST GO
We've selected 25 potential purchases that range from cash-rich
oil giant ExxonMobil to small Chinese consumer electronics
maker Nam Tai Electronics to farm-equipment maker Deere.
BIG CASH-RICH COMPANIES
Net Cash
Recent YTD P/E* Cash As % Of
Company/Ticker Price Change Ratio (bil) Mkt Val
ExxonMobil/XOM $68.00 -27% 7.3 $30.06 8.5%
Microsoft/MSFT 22.30 -37 10.5 23.66 11.6
Apple/AAPL 88.74 -55 16.2 20.77 26.4
Qualcomm/QCOM 39.00 0 14.7 11.18 17.5
Intel/INTC 15.50 -42 11.9 9.90 11.7
Dell/DELL 13.43 -45 8.9 7.33 27.9
Ebay/EBAY 15.96 -52 8.8 4.05 19.5
Motorola/MOT 4.56 -72 23.3 3.09 29.9
Yahoo/YHOO 12.65 -46 27.3 3.07 17.5
EA/ERTS 27.80 -52 17.4 2.68 30.2
Loews/L 26.57 -47 5.8 3.50 30.2
E = Estimate, forward 4 quarters
Bad as we may feel about QCOM's current stock price, it's noteworthy that QCOM would have taken 4th place in this table, and would likely have been included but for the fact that the YTD change in its stock price is actually zero!
Let's face it, QCOM is not a sexy, headline grabbing company, except when there's some litigation related downer to report. There are no glitzy Steve Jobs style orchestrated dog and pony shows for new must-have consumer products, and for the most part, the company is under the radar of the media and many of the analysts.
But despite the current financial and market meltdown, QCOM is well positioned for steady growth, high margin revenues and earnings for the next few years, even if there is a general slowdown in economies worldwide.
This may not become evident until Q1/Q2 next year, since I think the company will play things safe and conservative in their FY2009 guidance on 11/5. For me still a "hold" and would even be a "buy" here if I didn't already have enough.
David |
