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

To: carranza2 who wrote (114304)	2/25/2002 2:43:13 PM
From: Sawtooth	Read Replies (1) \| Respond to of 152472

C; regardless of what side of any of the arguments one resides on, I think John's arguments have stimulated some good discussion. I might be the only one, but thoroughly grinding some of his theories have cleaned away the cobwebs from a few not often visited corners of my head. Best. .......VVVVVVVVVV

To: carranza2 who wrote (114304)	2/25/2002 3:40:31 PM
From: Stock Farmer	Read Replies (3) \| Respond to of 152472

Well, we can avoid getting personal and keep things civil if you would like. The market's doing its own evaluation anyway. That's the one that counts. I'm trying to adopt a position that doesn't leave me in the red. I may be off base. But I don't think so. As to your questions about why post here about Qualcomm, well it would be rather off topic of me to go on and on and on about Cisco or Seibel on the Qualcomm thread. So I'm using Qualcomm. Why did I break lurk? 'Cause someone posted that Qualcomm was a cash generating machine with a price that was fair relative to T-Bills. And I thought that was kinda missing a few facts. Speaking of apples and oranges, if you are going to pick some comparators, how about at least being fair. Comparing the best of a bad bunch against the worst of a good bunch isn't exactly intellectually honest. Particularly when the spectrums overlap so widely :) If you're having trouble identifying good earnings at a reasonable price you might want to check that ucky MO. I've been quite clear on my views. Are you as clear on your own? For example, you are critical of me "ignoring" GAAP? Funny but I haven't seen you weighing in about the foolishness of folks using pro-forma numbers. Smacks of picking the accounting method that most closely shows Qualcomm is a good buy. I could barely resist the temptation to label that Carranza's recommended Accounting Practice. But I will resist, in the same spirit as yourself. My position? Simply stated for you, although from your posts over on BBR you are clearly a complex and intelligent guy: I happen to believe that GAAP does understate economic results by the degree to which stock options supplement the income of employees. When this is small relative to the whole piece of the puzzle, well we can ignore it. When it is large, ignorance is bliss as long as one doesn't mind potential portfolio meltdown. You be the judge. Depending on how you determine how "important" it is to factor in a variety of economic costs, Qualcomm's PE ranges between 38 and 80 according to latest quarter's results. 1Q '02 Results GAAP Pro Forma Pure - S.Opt "Pure" - S.Opt Earnings 139,233 139,233 189,716 189,716 Option Cost 0 49,263 0 49,263 ------- ------- ------- ------- Adj. Earnings 139,233 89,970 189,716 140,453 EPS $ 0.17 $ 0.11 $ 0.23 $ 0.17 Annualized EPS $ 0.68 $ 0.44 $ 0.92 $ 0.68 PE @ $35 51 80 38 51 "Yeild" 1.94% 1.26% 2.62% 1.94% As for the 90% royalties on the technology that has yet to sweep the planet? That will be nice. When it arrives. I'd like a slice of that too. Hopefully it will add up to 30 Billions in present value real dollars, over and above all the other non-zero costs of collection. Which are running fairly high at the moment. If it starts to flood in at 5x the current rate [EDIT: Oops, and all those other pesky costs go to zero] we might actually see it accrue to us over maybe the next two decades or so. At which point we will not even break even against a T-Bill at the current price. And given that wireless has gone through 2.5G's in a decade, that means we'd better be hoping that 8G depends as much on Qualcomm's patents as 3G does. So when I look out beyond the forest to the valley in the mountain on the planet where it's found I don't see the return. And when I return to right close up I don't see the return. But we're all welcome to our views. I hope. Without slandering each other just because we have them. John