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

To: slacker711 who wrote (93206)	7/17/2010 9:53:59 PM
From: BDAZZ	Read Replies (1) \| Respond to of 196559

Well done analysis, Slack.. Some analysts believe that wireless is actually a safer haven than most in any recession.

To: slacker711 who wrote (93206)	7/17/2010 11:17:56 PM
From: Jacob Snyder	2 Recommendations Respond to of 196559

Thanks for that analysis, of how QCOM earned only $0.95 in 2009. I had assumed, without looking (my mistake) that the falloff in earnings was mostly due to less revenue and/or lower margins in chipsets. Apparently not.

To: slacker711 who wrote (93206)	7/18/2010 4:07:03 AM
From: Maurice Winn	4 Recommendations Respond to of 196559

< 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.* > It's pedantic, but I have never seen misplaced apostrophe's in Qualcomm's vast tracts of writings, let alone use of "horde" instead of "hoard". Perhaps they are not actually morons. It's a shame the lawyers they hired were not as talented as the proof readers. Once upon a time in a website of the Indian subsidiary there was some error but I don't think it was spelling [or misuse of a word]. Also, we should not compare the current share price with the absurdity of Y2K when the share price went ridiculous and was obviously going to take a dive. That was part of the crazy Biotelecosmictechdot.com irrational exuberance which our great, estimable and venerable idol Alan Greenspan KBE warned us about in 1995. It took a lot of years for the GSM Cartel to be whittled away and it's really only now that 3G is taking over properly. In the early 1990s there was similar irrational exuberance as Qualcomm's share price zoomed to $86 before going right back to below $18 a share. Success can be a long time coming. Mqurice

To: slacker711 who wrote (93206)	7/18/2010 9:23:32 PM
From: matherandlowell	14 Recommendations Read Replies (5) \| Respond to of 196559

" 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" Slacker: Let me offer a single voice of dissent here. I realize that I am starting to sound like a shillaber for management but consider this an honest question. First, your argument that QCOM's revenues and earnings held up remarkably well during the worst worldwide downturn since the Great Depression is well taken. Clearly the Q is not a cyclical company but rather will likely follow the explosion of 3G. The transition from 2g to 3g is not a cyclical transition. But second, and back to my point, it doesn't seem to me that you are being fair to QCOM management. As I read the graphs in the presentation you referenced, I see that at the start of the great worldwide meltdown of 2008, Qualcomm had on the order of $10 billion in cash. I think it was $6 billion onshore and $4 billion offshore, although I might have those numbers reversed. It was about $10 big ones. And then the world hit this tidal wave of the ages, disaster to tell your grandchildren about moment wherein we honestly wondered if there would be a systemic meltdown. And by the end of 2009, Qualcomm had raised their dividend and increased their cash holdings to $20 billion. That's bad management? That's a cyclical company that could really get hurt in another recession? That's a company that doubled the cash on the books during the worst year on record. Morons? I wish my portfolio had had an equivalent moron. I hate to continue with my unrestrained optimism and maybe Wednesday's conference call will throw some cold water in my face (and I admit I've got to start to lay off the Kool-aid), but this is a rapidly growing company with an admitted monopoly position (sanctioned by patent laws and royalty payments) that has a market cap of about $58 billion. With $20 billion in cash (some offshore and thus open to taxes upon repatriation), the enterprise value comes to less than $40 billion. That means it is selling for less than 4x revenues and about 10x free cash flow. At any other moment in market history, a company growing at greater than 15%/year with those kinds of multiples would be a screaming, pleading buy. We can't really blame management for the debt crisis. (They have 1/3 of their market cap in cash.) Anyway, I realize that patience is growing a little thin but I continue to believe that the stock is misunderstood by the average stock picker. The average hack has been duped into thinking that 3g will soon yield to the new 4g and that QCOM's margins are being squeezed; ASP's are dropping; all hell is breaking loose. The stock is down 25% for the year. This is one misunderstood and abused little guy. If I have a criticism of management's actions during the great sell off of 2008/2009, it is that they didn't repurchase the normal number of shares. With the market falling drastically, they only dropped about $200 million on repurchases. I suppose that they felt that the health of the company demanded an increased cash position. So they let the price fall and banked the cash (much of it offshore). They should have sopped up some of the stock in the low 30's. As it was, even with the low share repurchase, the stock fell considerably less than the average wireless enterprise or tech stock. But the point is, it has not really participated in the great stock re-inflation of the second half of 2009. And it is due. I have a tough time faulting management for doubling the cash on the books during one of the worst years in market history. Call me a shill. j.

To: slacker711 who wrote (93206)	7/20/2010 11:19:59 AM
From: Jim Mullens	4 Recommendations Read Replies (1) \| Respond to of 196559

Slacker, re: Morons / cash hoard / investment portfolio / Buffett- An alternative / minority opinion Part 1- "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….” >>>>>>>>>>>>>>>>> 1) . ”If anything, the portfolio is actually more aggressive in October of '09 than October of '08.” …………….10/31/08…..10/31/09 Cash………45%..............28% Bonds……..40%.............59% Stocks……..15%.............13% It may be more aggressive in the sense that there has been a significant move out of cash (money market securities with minimal returns… ( 0.5%) and into much higher yielding bonds. However, the stock position was reduced to 13% from 15%. 1.a) An allocation mix of 87% cash/ bonds v 13% stocks does not appear “aggressive” IMO. 1.b) Looking at the 1year returns of 2yr /5 year bonds funds (~2% - 4.9 %) vs <0.5 % on money market funds appears to be a positive move (non-moronic) IMO. Quarterly Pre-Tax Returns1 as of 06/30/2010 Annualized Returns Description 1 Year 06/2009 3 Year 06/2007 5 Year 06/2005 10 Year 06/2000 Inception 06/1987 DFFGX 4.94% 5.20% 4.42% 5.11% 6.19% Short GovernmentMorningstar Category 4.30% 4.89% 4.04% 4.30% -- BofAML US Trsy/Agcs AAA 1-5 Yr TR USD2Broad-Based Index 4.04% 5.97% 4.85% 5.05% Quarterly Pre-Tax Returns1 as of 06/30/2010 Annualized Returns1 Description 1 Year 06/2009 3 Year 06/2007 5 Year 06/2005 10 Year 06/2000 Inception 02/1996 DFGFX 1.90% 3.33% 3.59% 3.66% 4.34% World BondMorningstar Category 8.81% 6.68% 4.78% 6.43% -- Citi WGBI 1-3 Yr Hdg USD2Broad-Based Index 1.98% 4.19% 4.01% 4.07% 1.c) My recollection is that a few years back Keitel / Granis and company were criticized for being too conservative in their “cash management” philosophy.