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

To: gc who wrote (108038)	11/6/2001 5:57:14 PM
From: Keith Feral	Read Replies (3) \| Respond to of 152472

gc: Maybe you didn't hear - the FED jsut cut short term rates for a tenth time. This is not a market to short.

To: gc who wrote (108038)	11/6/2001 6:19:13 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 152472

re: You may even get it below 40 Maybe, maybe not (market correction). We've had a lot of bad news ignored in the last few weeks. Even without a market correction, I'd say normal volatility, and the coming-soon forward EPS estimate cuts, will get us to 45. If the Nas retests the September lows, I'll be buying QCOM on margin at 35, and (finally) thinking about LEAPs. I would love it, if this stock could finally get unabsurdly valued, so I can load up. OK, what's a Fair Value stock price for QCOM now? Let's assume forward 12M EPS is $1.10. That is, let's assume we get no more warnings (IMO, that's still a bit high and a bit too optimistic; I'm guessing we get one more warning). What PE? The LT expected EPS growth rate is down to 31% (used to be 40%). Earnings are basicly going to be flat, from 2000 to 2001 to 2002. The earliest we can expect that 31% growth rate to start happening is in 2003, which is so far away it is over the horizon, way past the limits of visibility. So ignore it. The 1995 PE range was 43-110. I use that year, as it was the last year we can definitely say was pre-bubble. As a WAG, I'll say a PE of 40 is reasonable. OK, then: 1.10 X 40 = 44. More conservatively: 1.05 (my guess for forward 12M EPS, which I said months ago) X 30 (still high, even for the highest-quality stocks, in a recession) = 31.5 Of course, if you want to use that 1995 high PE of 110, you get a different stock price. I won't go there.