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

To: limtex who wrote (110005)	12/29/2001 9:24:37 AM
From: Wyätt Gwyön	Respond to of 152472

fun with numbers (not to be taken seriously)... inputs: historically, the S&P500 has had a dividend yield of around 4% with a 41% payout ratio. recently, the dividend yield was around 1.6% with a 28% payout ratio. scenarios: a. if qcom tripled earnings overnight (to ~2.40) and then paid the current S&P500 average market dividend at the average payout ratio, i calculate it would be priced at 42. b. with the same earnings, and a historical-average dividend and payout ratio, i calculate it would be priced at 24.60. applications: to be priced at 50 under scenario a, qcom would need to immediately earn 2.67. to be priced at 50 under scenario b, qcom would need to immediately earn 4.87. extensions: if one assumes 1.60 of earnings (double the approximate current runrate), then scenario a: price calculated at 28 scenario b: price calculated at 16.40 if one assumes .80 of earnings (the approximate current runrate), then scenario a: price calculated at 14 scenario b: price calculated at 8.20 if one reduces the approximate .80 runrate by a "reasonableness factor" of .67 (given qcom's many past writeoffs) to obtain "mucho runrate" of ~.54. then, scenario a: price calculated at 9.45 scenario b: price calculated at 5.53 conclusion: i think qcom is worth at least $5 a share, and perhaps some positive integer multiple of that amount. my personal buy-in target remains in the pre-teen region (11-12). caveat: just my humble opinion