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

To: Jacob Snyder who wrote (93162)	7/15/2010 4:52:41 PM
From: Jacob Snyder	9 Recommendations Read Replies (3) \| Respond to of 196538

temco2: I've read your last 20 posts. You are long, disappointed, and don't understand why you've been disappointed by QCOM's performance for so long. To me, it's obvious: you read PC World instead of QCOM's 10-Q and 10-K. If you do read the 10Q, you don't seem interested, because you never post anything from them. You get your info about present and future performance, pre-digested and optimized (sic) by analysts. You're looking the wrong places for useful info. <Just can't believe were at this point when just about every person you see in public is carrying some kind of wireless device.I always believed Q had a small part in most of them, apparently not.> QCOM's addressed market has expanded spectacularly, as you note. But QCOM has been inefficient at extracting increasing sales from that growing market; inefficient at turning increasing revenues into increasing profits (a royalty company is supposed to be very good at doing this); inefficient at turning increasing profits into sustainably higher stock price. Part of it isn't QCOM's fault: we are in a 10-year secular bear market, where valuations have fallen, so even increasing profits haven't meant increasing stock prices, for many companies. Intel used to be a growth stock. Now, it's becoming a safe stable dividend stock. It still has some growth, but modest and steady. I expect, before this secular bear market is over, INTC will have a 5% dividend yield. That's the transition QCOM should be making. Instead, QCOM is pretending it's still a kinky go-go hyper-growth gonzo Gorilla story stock...but that's just hype now; there aren't any numbers to back up the PR. Not real (GAAP) numbers, anyway. <$3.00 long-term EPS power estimate... ...What am I missing here?> What you are missing is accurate numbers. QCOM has never made $3 GAAP EPS, and won't make that much this year, or next. Or the year after that. I'm not sure what a "long-term EPS power estimate" means to that analyst, but I suspect it is made up of equal parts hopes and dreams, seasoned with exuberance, and whipped to a creamy froth (tastes so good going down, doesn't it? But it's all empty calories). Hopes and dreams. Isn't that what most analyst guesses are? The market values a stock based on expectations for earnings over the next 12 months (sometimes, only the next 3 months). Beyond that, nobody really knows and nobody really cares. IMO, QCOM is a trading vehicle: buy at 36, sell at 48. It won't be investment-class until: 1. they stop giving humongous option grants. If management talent leaves because they don't get their options, good riddance. Management has failed to deliver higher stock prices for 10 years; why do they deserve options? 2. they pay a decent dividend. Intel pays 3%, JNJ pays 3.6%. QCOM could easily boost their dividend into that range. But paying a decent dividend means discipline on... 3. ...not wasting billions on Globalstar etc. One or two such mistakes I can forgive, but the list is long. 4. earnings consistency, and earnings growth. Not big growth, just modest and sustainable. 2007 GAAP EPS was $1.95, and has been lower every year since. There is some chance they might exceed $1.95 in 2011. Given the growth in the cellphone market, that's poor performance. 5. share buybacks which actually decrease the share count. 6. Share buybacks when the stock price is low. Why is it, that so few companies can do this? BP bought back vast amounts of shares, when the stock was in the 40s and 50s. The stock recently hit 27, and right then stories began appearing, that BP was considering selling equity. GE did the same thing, selling equity near multi-year lows in late 2008, after huge buybacks in previous years. A pattern of "Buy high, sell low", does not give confidence in management.

To: Jacob Snyder who wrote (93162)	7/21/2010 5:37:24 PM
From: Jacob Snyder	1 Recommendation Read Replies (5) \| Respond to of 196538

3Q10: Not bad results. Met or slightly exceeded expectations, nudged up guidance. Not spectacular results (like AAPL, INTC, ASML, a list of other semis and semi-equips), but should be good enough to keep the stock above 36$. Unless I'm missing something, no ugly surprises. Spent 1.18B$ on share buybacks, 32.4M at $36.42 average price. Share count 1642M now, was 1678M at the end of last quarter. So, share count is (I'm pleasantly surprised) going down. 2010 GAAP EPS guidance midpoint upped a bit to $1.84 average devise ASP: 2008 219$ 2009 205$ 2010 186$ est. # of devises sold has to climb faster than ASPs are going down, for revenues to go the right way. No 2011 guidance.