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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (4309)	6/20/2000 4:45:00 PM
From: Gus	Read Replies (1) \| Respond to of 5195

You're ignoring China Unicom's actual growth of close to 1 million GSM subscribers a month in favor of a sop? LOL. After the way the 4 actual CDMAOne trials held at substantial expense over the last 2 years resulted in 0 CDMAOne contracts????? Fool you once, shame on me. Fool you twice, shame on you. Speaking of management credibility, here's a critique of your beloved management's PR style. Try not to get too emotional about it, okey dokie? It's not personal. Rules for picking up the pieces I find several lessons in the Citrix case that I think are worth applying to other stocks that have gone splat. First, never assume that a stock that has been cut in half can't be cut in half again. Qualcomm, for example, was near $180 in January and had tumbled to $90 by May. But since then, it has fallen into the mid-$60s, and I don't see any reversal yet to the stock's downward trend. Second, it doesn't pay to try to buck a nervous market with a damaged stock. The news out of Qualcomm hasn't been all that terrible. Sure, the company has lost business in China that it encouraged investors to believe it had locked up. The end of government subsidies for handset purchases in Korea, the biggest overseas market for Code Division Multiple Access (CDMA), certainly isn't good news. And the possibility that Globalstar Telecommunications (GSTRF, news, msgs) will have to pull the plug on its satellite system could cost Qualcomm about 10 cents a share in earnings. But an unsettled general market has magnified the power of these bits of news and turned it into continuous downward pressure on the stock. Three, there's little worse for a stock than a belief among investors that management has lost its credibility. Much of the damage to the price of Citrix is the result of investors deciding they can't trust management to give them the straight dope. Much of the pressure on Qualcomm results from a similar skepticism. Judging from the traffic in the Market Talk with Jim Jubak Community, a lot of investors feel that management sold them a bill of goods by announcing a deal with China Unicom (CHU, news, msgs) that turned out to be anything but firm. Fourth, remember that if an expensive stock misses a quarter by 50%, the price will be cut in half twice -- once for the missed earnings per share, and a second time to account for a lower multiple. A.G. Edwards recently put a target price of $120 a share on Qualcomm. That's about 110 times projected fiscal 2001 earnings per share. Plenty of room there for a disappointment to whack the stock. Fifth, look at the trend, and not just the absolute numbers, when it comes to earnings growth. Qualcomm is coming off a huge growth run. Earnings per share in the last four quarters have grown by 350%, 285%, 212% and 152%. That puts projections of 52%, 35%, 36% and 49% earnings-per-share growth over the next four quarters in a very different light. For the full fiscal year 2000, Qualcomm is projected to grow earnings per share by 68%. In fiscal 2001, analysts are projecting that growth will drop to 31%. Qualcomm is in the midst of making a transition, it seems, from a supergrowth stock to merely a great growth stock. Such transitions can be tough on a stock's price. Finally, though, I think your decision to buy Qualcomm at this price, or to take a pass, comes down to your own belief in management and its numbers. A 12-month target price of $120 a share that depends on a 70 multiple to fiscal 2001 earnings seems steep for a stock that might be growing at a rate of just 31% at that point in time. At a minimum, before I took that risk I'd want to believe that Qualcomm management will deliver on the guidance that it has given to Wall Street. And I'd feel a lot more inclined to take that bet if Qualcomm management had a history of low-balling earnings and prospects for the company's future business. Personally, before I put my money into this one, I'd like to see a quarter that delivers on projections and a conference call that reveals a management that's talking conservatively for a change. moneycentral.msn.com On second thought, somebody better tell Jim Jubak to duck. P.S. How long do you think it's going to take China Unicom, the LARGEST paging network in China, to migrate all its 2-way paging customers to its GSM networks with SMS and WAP?