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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (12352)	6/15/2000 1:02:00 PM
From: Jon Koplik	Read Replies (2) \| Respond to of 13582

Two good posts from : clubs.yahoo.com ********************************** Message 23593 of 23597 Reply Some good points from Roberts sailaon 6/15/00 10:49 am Mostly the standard stuff, but Mark Roberts gets some good points in so at least it's balanced. He seems to be the only analyst that bothers to call anybody to validate rumors. His comments are snipped out below. It's interesting to note that his estimates are on the high side of consensus and management has told him as of yesterday to stick with those numbers. Doesn't sound like a missed quarter to me! LOL zdii.com <snip> Mark Roberts of First Union Securities, who reiterated a "strong buy" rating on the stock Thursday, says that's not so. The government's plan to cut subsidies is part of a move to shift its exports into high gear, a move that could benefit Qualcomm. Roberts said he was flabbergasted by other analysts' downgrades. He said he has spoken with Qualcomm management since Wednesday's Bear Stearns conference, who encouraged him to maintain his estimate for the upcoming July quarter, and said they are comfortable with estimates for the fourth quarter. First Union's estimate is 3 cents above the consensus of 30 cents a share for the fourth quarter, as reported by First Call's poll of 19 analysts. First Call is expecting a profit of 27 cents a share for the third quarter, and $1.08 for the year. "They're acting like this is an apocalyptic event," Roberts said of other analysts, questioning whether they had spoken with the Korean government, or manufacturers such as Samsung and Hyundai. Roberts said the purpose of the Korean government's elimination of handset subsidies was to slow down manufacturing in order to free up capacity for the manufacture of devices for export. "The government is encouraging (the manufacturers) to ship more phones to South and North America," Roberts said. He has spoken with Samsung, Hyundai and LG International, all of which said they don't expect any substantial change. As for Globalstar, Roberts said "We'd built that expectation into our model." ********************************************** <- Previous Next -> Message 23594 of 23597 Reply Keep your eye on the ball!! nbfm (45/M/san diego) 6/15/00 10:49 am Yes, it can be, and is, frustrating to watch Q get buffeted on the downside almost daily. But, keep in mind that a stock price and the underlying financial health of a company sometimes move together and sometimes those two things are divorced. We saw it on the upside (and enjoyed it) and now we are experiencing it on the downside. There is a lot of uncertainty and fog now surrounding Q (as many have observed, there is rarely such a split amongst the analysts as there is now over Q). A while ago Q was priced for "perfection", it is now priced for disaster ("no positive news" in Snyder's words) (e.g., G* failing (to the tune of .10/share [all of $70 million -- in a non-cash one time charge], China will never go CDMA [or if it does, it will be a Chinese version of CDMA which bypasses Q's IPR and was invented in a rice paddy last week]; Koreans have stopped purchasing handsets (but, interestingly, there is no news from the Korean manufacturers that they have slowed production, which is running 24/7. So, exactly where is this production going? Latin America, U.S., etc.), Korea will go W-CDMA; Europe will remain GSM (with the data rates that come with it); etc. Let's look at some facts: 1. Q is making app. $2 Billion per year in free cash; has app. $2 bill in cash in the bank; with no debt. It is investing this cash in a way calculated to increase the demand for CDMA (yes, some of this money will be invested in failing opportunities; but most will actually make Q even more money.) 2. CDMA growth in non-mature markets is astronomical (Latin American is over 200% annually (yes, from a very low base); U.S. growth is 100%,; and SPRINT and Verizon are deploying upgrades (like access to AOL) which will allow them to distinguish their product from competing technologies). 3. Q continues to extend its lead in CDMA2000 products -- it will keep this ASIC market pretty much to itself. Q announces (for the first time as far as I can tell) that it will have a W-CDMA chip in production by the end of next year. (To me it is still unclear how much less Q makes from W-CDMA when compared to CDMA2000.) 4. CDMA systems are NOW deployed which provide 64 kpbs; CDMA systems will be ON LINE within the next six months which will double that rate. Now, what is the GSM rate today and in six months? Do I hear 9.6? (However, without content and applications, it doesnt matter how fast you can go. To me, content and apps. are the key -- and you can see company after company trying to commercialize better content and unique apps. I am betting that sooner rather then later, killer apps. will emerge which will further drive CDMA growth.) 5. Q claims, in a PR, unambigiously and clearly, that it has essential patents in every variety of CDMA -- so sooner or later all wireless mobile solutions must travel through Q's tollgate. (IF that PR was wrong, then we are all in big trouble -- but management has always been straight shooters -- although sometimes aiming at their own feet.) For short term traders -- who knows what the price will be next week. For LTBH types, keep your eye on the company's business -- the stock price simply becomes an opportunity to buy. END **************************