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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 (93196)	7/17/2010 3:31:41 PM
From: temco2	2 Recommendations Respond to of 196554

<You probably think that's absurd. But, if anyone had warned you, back in late 1999, that the stock price would be at $36 in 2010, you would have said:<...need to lighten up on some of your medications.> Well said Mr. Snyder, but what about that list of 4 or so other good/solid growth companies you would recommend for us faithful QCOM holders? I'm sure there're others like me that don't want to be holding shares at $25.

To: Jacob Snyder who wrote (93196)	7/17/2010 3:47:00 PM
From: BDAZZ	12 Recommendations Respond to of 196554

>>A 30% decline from current prices would be more realistic: QCOM at $25, taking out the 2008 low.<< >>You probably think that's absurd. But, if anyone had warned you, back in late 1999, that the stock price would be at $36 in 2010, you would have said: << You havent been around QCOM very long if you think that drop would be considered absurd. At one time In the last decade Qcom declined from 100 down to 24. Some here have seen worse declines, so no we don't think that's absurd. And yes the end of the world economy can always be just around the corner, and the wireless market could crash to zero. That there is risk in the stock market is a given, not an argument. Many people play trading ranges and make a few bucks here and there and lose it as well. The big money in the market has always been made by the patient. That's not saying never sell. When qcom fell to 12(split adjusted) it was just before that new cycle of phones, (color screens and apps) that takes an agonizing long time was about to hit the market. Many of the traders misread the drop as a disaster. Many posted to this board to get out, that the sky was falling. The faithful, as you critically refer to them, were posting they were buying. I chose to listen to them instead of the traders. Those who saw the opportunity loaded up and made a 4x. Maybe some took profit, maybe held. All I can really ask is the chance to sell at a big profit if I choose. I thank God for that absurd drop to 12. It is the reason I now own a new home mortgage free. We obviously have different goals. You want to make some bucks here and there. Others want the big bucks. I'm not saying you are wrong, that's your goal. So it's just as absurd for you to be critical of the faithful. I know some of the faithful here who have thousands and thousands of shares at a cost basis of less than zero. That's what being one of the faithful has done for them. They are playing with house money. That being said, over the past few years the faithful have become increasingly critical of QCOM management, but they still see a potential here. Instead of trying to tell these guys, who have made a hell of a lot more money than me, what to do, I am listening to them. Once again, there is a risk. We know. So I hope this gives you a better understanding of the faithful. Many are coming from big profits and see a potential for more before it is finished. Good luck to all of us.

To: Jacob Snyder who wrote (93196)	7/17/2010 9:35:29 PM
From: slacker711	22 Recommendations Read Replies (6) \| Respond to of 196554

In 2009, QCOM's EPS was only $0.95 (GAAP, of course). In a double-dip recession in 2011, EPS could return to that level. 25/0.95 = a PE of 26. If anything, that PE would be too high for the circumstances (cyclical stock with erratic earnings, in a recession). The historical GAAP numbers are a good starting point, but you really are going to be led astray if you dont dig through the numbers. Specifically, why did Qualcomm only earn 95 cents GAAP in '09? If it was because of a decline in the overall handset/chipset sales due to the recession, then there is little that would likely be different in a double dip. OTOH, if there were other less repeatable factors then the 95 cent estimate may be way too conservative an estimate. As a starting point, here are the EBT numbers for the royalty (QTL) and chipset (QCT) divisions for FY '08 and FY '09. files.shareholder.com FY '08 FY'09 Rev/EBT Rev/EBT Royalties (QTL) 3.62/3.14b 3.61/3.07b Chipsets (QCT) 6.72/1.83b 6.14/1.43b Clearly, the flow of royalties held up remarkably well despite the financial collapse. The chipset division did less well, but even there it is worth going inside the numbers. The biggest factor in the drop in QCT's earnings/revenues was a pullback in channel inventory. Specifically, Qualcomm went from 19 weeks of inventory to around 14 weeks during FY '09. That means that Qualcomm's chipset sales were almost 10% below end unit demand....and that is nearly exactly the amount that chipset revenues fell in '09. So will that type of inventory contraction happen again if we see a double dip? It is virtually impossible since inventories have barely budged above the crisis low. I think they now sit at 15 weeks which is at the very low-end of the historical range. Both of Qualcomm's main businesses should hold up fairly well under most economic scenarios. The above numbers still dont explain the 95 cent GAAP number though...and that is because the GAAP numbers include the catastrophic (and moronic) losses that Qualcomm suffered in their investment portfolio. Can that happen again? Unfortunately, the answer is yes. Page 27 of the link above shows a breakdown of Qualcomm's cash portfolio. If anything, the portfolio is actually more aggressive in October of '09 than October of '08. I dont think it can reasonably be expected that portfolio losses would get anywhere near the level of the financial crisis so I would still apply some discount to the '09 number, but clearly there are still some risks. So basically, I think it is wrong to call the core Qualcomm businesses cyclical....however, the morons in charge of this company have made it so because of their passion for trying to extract every last dime out of their cash horde. A passion which has cost shareholders billions over the years. I dont think I paid much attention to the breakdown in cash holdings when it was first published....however, now that I have, my only conclusion is that PJ and the entire financial team should be fired. I am sure they have done well over the last year with their returns, and I am also sure that it will eventually end badly. If I wanted a management to invest my money, I would go with Buffett. Slacker