Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: engineer who wrote (102750)	6/9/2011 10:26:38 AM
From: Art Bechhoefer	5 Recommendations Read Replies (1) \| Respond to of 197299

Engineer -- First of all, I'm talking about earnings increases of better than 15% annually, and preferably 20%, not revenue increases. Second, I'm drawing a major DIFFERENCE between QCOM and INTC, MSFT and NOK. GOOG is in a different category altogether. QCOM is the innovator for wireless communications -- a field that is now expanding more rapidly than the mature PC sector. I said nothing about MSFT being limited to PC based software. Geez, I don't know why people try to push their own arguments by putting their own words into mine. And buying back shares is a strategy to correct a serious sympton -- overcapitalization. It is generally recognized that a company operates more efficiently and does a better job for its shareholders if it operates with a certain amount of debt. It's fine for a company to boast that its cash flow is so large that it has no long term debt. But if you look at the implications, it means that the return on investment will be LOWER, unless the company is borrowing money at unusually high interest rates. Furthermore, when a company has a lot of cash just sitting out there, they usually invest it poorly. And even if they invest it conservatively, it is likely to return something of the order of 4% annually. Give me the cash. I'll get more out of it than that! Let me put it another way. If a company can borrow at 8% (high in the currently depressed economy) and can use that borrowed money to increase earnings by, say 16%, then NOT BORROWING is foolish. Is that difficult to understand? Let me summarize, hopefully for the last time. Qualcomm has the largest cache of intellectual property of any company involved in wireless communication. Its chips purportedly work better and draw less power than competing products. It gets royalties from practically every company involved in producing or selling wireless equipment that uses QCOM patents. And wireless communications, especially for data files, is the fastest growing segment in the communications sector. With all that going for it, can Qualcomm show ONLY 15% revenue growth, and possibly less growth in earnings? C'mon, they can do better than that! Art