To all: These are my first comments on QCOM. I'm director of Independent Investors Forum, the oldest online, interactive investmnet advisory service, begun in 1981, headquartered in upstate NY. Here are some recent thoughts on QCOM.
1. WSJ article: Did you know that both WSJ and BARRON'S (another Dow Jones publication) have periodically run derogatory articles on QCOM, often without good sources, or without getting contrasting opinions from other sources? About 4 years ago they had an article that quoted an engineer saying CDMA would never work (his test data were already outmoded when he made his remarks). Makes you wonder if Dow Jones & Co. has an agenda other than to report news.
2. QCOM as a long term investment. I first recommended QCOM in Feb. 1992 and have not regretted it. The investment community generally underestimates the value of the patents and the value of skilled management, both of which are in abundance at QCOM - far greater abundance than at most other companies. You can invest long term solely on those two fundamentals.
3. QCOM management is also shareholder sensitive. Remember when they put out convertible preferred stock? That's the least damaging way to raise cash without hurting existing shareholders. Straight bonds would have cost higher interest, and straight common stock would have diluted earnings. Most analysts don't think about these features, but that's what long term value investors like.
4. Handling the competition. These guys aren't stupid. They've managed to hold their own against companies 10 times larger. They also are good employers and get the cream of the crop when hiring professionals.
5. Globalstar - ought to compete easily and at lower cost than Iridium simply because the whole system is more elegant and better designed, using fewer satellites and lower power handsets. Will eventually produce equity income, but meanwhile simply adds to overall intrinsic value (not book value, obviously) of QCOM.
In short, QCOM is and has been my best long term investment recommendation. I don't see much problem in its reaching 90 or 100 by year's end, unless the whole market collapses. Art Bechhoefer |
