Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 163.33

-1.0%

3:59 PM EST

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To: LindyBill who wrote (26706)	4/10/1999 11:52:00 PM
From: dday	Read Replies (3) of 152472

Think you might look at the gross margin first and the net margin second. Then, figure what is taking the gross margin down--------where is the money being spent???? If it is spent prudently, then lower net margins can be tolerated for the time being. For number crunching that might satisfy you but I think the real story involves other numbers--------------------that is the future earnings power of this company over time. IMHO, that is what is fueling Q at this time. It is the recognition by the investment community at large that Q is an 'emerging gorilla' in some hard to convince minds or is already an 'established gorilla' in more bullish minds. With that in mind, the pricing of Q takes on a dimension far greater than just a PSR ratio, net profit margins or p/e. Keep in mind, that 'gorilla' advocates that inhabit Planet WallStreet advocate considering the future earnings power of company as a means of valuing it today (a present value-- discount model theory). They also note that 'gorillas' are often underestimated in terms of their earning power. In other words, envision the future of the industry and realize Q's position in that industry and make a judgement. Maybe 2.9x revenues and a 30 multiple on nest years eps estimates is 'cheap'?????? I can only say that in my investing lifetime, I was a confirmed "value" investor 'number crunching nut' who recognized the power of MSFT and AMGN early on but passed based on poor 'overvalued' fundamentals. Maybe I am foolish or caught up in a trendy 'new wave' theory, but, by altering my definition of value, has allowed me to participate in many more highly profitable stocks. It has also led to my continued bullish stance on Q....... Best of luck to you.

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