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Wall Street Research
MARKET DIGEST ONLINE WHISPER
STOCKS...THURSDAY, APRIL 22, 1999
QUALCOMM: (QCOM) $195 1/16 Up $54 7/16 and
traded on the NASDAQ Stock Exchange.... Yesterday,
we received several emails on Qualcomm, but one in
particular struck our fancy. We asked Ray's permission to
reprint his email, so here we go...... "I've never seen
anything like it! You and your staff are doing a fantastic job,
and I cannot begin to tell you how happy and pleased I am
with your service. I've only been a subscriber for five
months, and I have done exactly as you suggested and
focused all my buying on your Friday review stocks. I
thought I was paying too much as a first time buyer when I
bought Qualcomm on April 9 (Friday Review Day) at $147
and yesterday it closed at $195!! I'm now up 48 points in
less than two weeks!! My other 'Review Friday' purchases
include Qwest Communications on Friday March 26 at
$71, now @ $92 1/2; Psinet which I purchased on March
19 at $40 1/2, now at $56 3/8; TMP Worldwide (TMPW)
on February 19 @ 51 1/4, now at $56 1/2 and Carnival
Cruises (CCL) on March 12 at $45 3/4 now at $44. Of the
five stocks, only Carnival is down and it's only down about
one point from where I bought. My remaining stocks are all
up substantially - even after gaining as much as several
hundred percentage points from your original
recommendations. In addition, I've made 100%+ gains in
several of your option recs. Keep up the great work and
keep up 'Review Fridays.' Friday is my most favorite day of
the week!!" Sincerely, Ray Goodman, Los Angeles, CA.
P.S. I've had accounts with several of the majors, and your
research beats theirs hands down!!....... Thank you Ray for
your kind comments and thanks for the number of other
positive emails we received yesterday on Qualcomm. For
review once again, we last updated Qualcomm on Friday,
April 9 at $148 3/8 and since April 9, we're up another 47
points. Originally recommended on January 27, 1999, at
$51 7/8, the story hasn't changed....it's only gotten stronger.
Here's excerpts once again from our original
recommendation..... We all knew the day would come
when mobile telephones would rule our lives, and they
would be communications centers equipped with everything
to keep us in touch with our world including the likes of
voice mail, paging and e-mail. The vision has arrived as
digital wireless technologies are replacing older analog cell
phones. Heading up the revolution is San Diego-based
Qualcomm, a conglomerate that sells Eudora - e-mail
service, runs OmniTRACS - satellite-based tracking
system, and owns Globalstar - satellite communications
system. But those endeavors are outperformed by the
company's digital wireless businesses, which range from
making wireless phones to manufacturing chips and
base-station equipment. These products are based around
a rising technology Qualcomm pioneered, called Code
Division Multiple Access or CDMA. CDMA was originally
used by the military but after two years on the market, it has
4 million subscribers worldwide. It is ranked third behind
the technology of Time Division Multiple Access (5 million)
and Global System for Mobile Communications (50
million). Among CDMA advantages, multiple signals can
share a single channel, so that radio frequencies handle lots
of calls simultaneously. That provides higher capacity per
signal, better voice quality and fewer dropped calls as users
move from one coverage area to another. CDMA is
quickly catching on in the U.S. where the wireless market
has been slow to standardize. Nine of the 12 leading
cellular carriers and two of the three largest PCS carriers
have signed on with CDMA. The company licenses
CDMA to more than 50 leading telecom manufacturers
which pay Qualcomm a onetime multimillion dollar fee, plus
royalties. Those fees totaled $45 million in the third quarter
and the amount should grow as CDMA spreads
worldwide. The Eudora business also figures into the
CDMA equation. More than 18 million people use the
software so it has become the world's most popular e-mail
program. The hope is to combine digital voice with Eudora
and other data products. Qualcomm will have to make
substantial investments to position itself against larger rivals.
Motorola, Samsung and others are coming out with CDMA
phones."
Yesterday's advance of 54 points was brought on by an
outstanding earnings report. Earnings were up sharply, but
the company also reported a one time $43 million loss. The
loss came after $166 million in charges mostly due to the
company's sale of a wireless infrastructure business to
Sweden's Ericsson announced last month. Qualcomm said
it posted a net loss of $43 million, or 59 cents a share, for
its second fiscal quarter ended March 28, compared with a
profit $26 million or 36 cents a share, a year earlier.
Excluding one-time items, Qualcomm reported record
earnings in the second quarter of $65 million, or 82 cents a
share, more than triple last year's $18.6 million, or 25 cents
a share. Revenues rose to $932 million from $761 million.
Last month, Qualcomm agreed to sell its so-called CDMA
terrestrial wireless business to Ericsson and announced that
the companies had settled a patent dispute. CDMA, or
code division multiple access, is a telephone standard
developed by Qualcomm and used mainly in the United
States. As a result of the better than expected earnings
report, several brokerage houses upgraded the stock to
either a Buy or a Strong Buy. Our assessment has not
changed. Qualcomm is still a Strong Buy in our books!!!
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