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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: sag who wrote (92314)	6/9/2010 3:09:14 PM
From: bradt	3 Recommendations Read Replies (2) \| Respond to of 196626

Just a follow up on the famous Ben Graham analogy--which I really like by the way. In case anyone cares, QCOM is being valued by the market (@ $35/ share) at about $58 billion. My current estimate is they are generating, at an annual rate, at least $4 billion in 'free cash flow' and that number will increase at a 10 to 20% rate over the next few years. QCOM has at least $18 billion of cash on the balance sheet which they don't need as the business generates excess or free cash every year so one might argue that the 'business' is being valued at ten times it's free cash flow. (58-18/4). So the stock price is down so far this year and 'momentum' watchers like Jim Cramer don't like it cause it's not going up and make ridiculous statements like 'they don't know how to execute' and a lot of people on this board voice frustration about the management--mainly because of the stock price. Sometimes it's tough to be patient but I won't be selling any shares at these levels.