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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: swisstrader who wrote (55024)	12/19/1999 1:33:00 PM
From: M's Fan	Respond to of 152472

Re: Money Mag "Best Investments for 2000 and Beyond" The 8 stocks picked were: Duke Energy Citigroup Cardinal Health Bristol Myers Medtronic Lucent Qualcomm Broadcom About Qualcomm, it said; Wireless communication is exploding. Goldman Sachs estimates worldwide wireless subscribers will reach 820 million in a couple of years, up from 475 million in 1999. Mobile phone penetration in the U.S. will double by 2005, with more mobile devices than PCs connected to the internet. No company is better positioned to exploit this boom than Qualcomm, which is emerging as a wireless hybrid of Microsoft and Intel. It owns the operating system known asCDMA, or code division multiaccess, that's becoming the industry's digital standard, and it controls the market for CDMA chips. CDMA was developed by the U.S. military in the '70's. Its major advantage over earlier technology is that wireless providers can fit eight times more calls on their radio frequencies than they could with analog-based systems. (Sprint PCS and Bell Atlantic Mobile use CDMA). Further, CDMA is expected to be the standard for what's known as 3G (third generation) wireless, in which broadband will allow your mobile phone to handle voice, data, and video. "A number of companies looked at CDMA in resaerch labs, but everybody thought it was too complicated" says Qualcomm CEO Irwin Jacobs. "But the fact that it works exceedingly well has become obvious" Qualcomm collects a royalty from every company using CDMA, including all the major handset sellers and telecomequipment makers. After Qualcomm finishes unloading its own money losing equipment business and its unevenly profitable handset operation, the company will start sporting software like margins. J.P. Morgan's Gergory Geiling figures that Qualcomm's operating margins will go from the low teens last year to 45% to 50% in 2000. The stock had a staggering run, but we think there's more to come. "Qualcomm is in an enviable position because people are underestimating how much we will do wireless", says Chris Bonavico, portfolio manager of Transamerica's Premier Aggressive Growth Fund. Qualcomm is among the funds five largest investments. At a recent $360, the stock trades at 86 times projected earnings for 2000, 2.4 times its expected growth. Bulls point to that growth, and Qualcomm's expanding margins, to justify its high P/E. But keep in mind that expectations are very high.