QCOM

[earthtodan]

I have to have to ask myself honestly, do I have enough conviction in this stock to hold on if the China situation drags on for a few more years, or escalates? I don't know. Maybe that means it shouldn't be a core holding.

[Roadmap2Retire]

Theres still a lot to like about QCOM
- Its a sector leader in the wireless industry
- New growth areas - IoT, vehicular networks (connected car)
- Zero debt

[rapidacid]

This seems alarming. Zero purchases ( green rows ) by any insider in nearly 3 years.

Am I reading this right?

http://openinsider.com/screener?fd=0&fdr...sults=1000

Perhaps this is the answer to the question: If they're spending billions of dollars over the years to buy back shares, why isn't share count going down?

They keep doling out options to insiders.

[earthtodan]

Some of those transactions might be exercise to hold, which means they are buying the stock and paying tax on the difference between the strike price and the price at exercise, even though they only have a paper gain (incentive stock options work like that). If they are indeed buying the shares for the strike price and paying tax on the paper gain, that's a bullish signal. What a lot of people do with ISOs is flip to hold, which means you exercise a block all at once, and at the same time sell just enough to cover the purchase price.

However the chart still basically looks to me like a bunch of cashing out.

What we can't see is the people who are not named insiders, i.e. regular employees. Insider transaction charts only show named insiders, which is basically executive status. If QCOM is issuing stock options to employees, I fully support that, and it wouldn't bother me as a shareholder. If hundreds of thousands of options are going to the executives, that bothers me.

[rapidacid]

This article is just as relevant today as it was two years ago:

http://seekingalpha.com/article/694141-q...areholders

Quote:Qualcomm has $15 billion with which to buy back stock in this scenario. Let us assume then, that the company will buy back its shares at $60. We chose $60 because it is a conservative figure that accounts for a likely rise in the stock should Qualcomm announce a buyback. We quantify the effects of a buyback below.

Qualcomm Buyback Scenario

Initial Fiscal 2012 Shares Outstanding +1,759,987,422
Less Share Buyback ($15 billion @ $60 per Share) -250,000,000
Ending Fiscal 2012 Shares Outstanding 1,509,987,422
Old Net Income/EPS $6,599,954,708/$3.75
New Net Income/EPS $6,599,954,708/$4.37
Increase in EPS +$0.62 (+16.533%)

[EricL]

(11-07-2014, 11:23 AM)rapidacid Wrote: This article is just as relevant today as it was two years ago:

http://seekingalpha.com/article/694141-q...areholders

Quote:Qualcomm has $15 billion with which to buy back stock in this scenario. Let us assume then, that the company will buy back its shares at $60. We chose $60 because it is a conservative figure that accounts for a likely rise in the stock should Qualcomm announce a buyback. We quantify the effects of a buyback below.

Qualcomm Buyback Scenario

Initial Fiscal 2012 Shares Outstanding +1,759,987,422
Less Share Buyback ($15 billion @ $60 per Share) -250,000,000
Ending Fiscal 2012 Shares Outstanding 1,509,987,422
Old Net Income/EPS $6,599,954,708/$3.75
New Net Income/EPS $6,599,954,708/$4.37
Increase in EPS +$0.62 (+16.533%)

It's a good thought in theory, however QCOM hasn't shown any history of actually decreasing the share count with their buyback program. According to page 15 of their earnings presentation, the company has spent over $14 billion in share repurchases since 2010, however in looking at the share count from Morningstar, the number of shares outstanding has actually increased over that time frame, from roughly 1.65B to 1.7B.

I am long the company, and think its a good long term hold, but would rather see an increased payout ratio than more buybacks.

[rapidacid]

Right, QCOM could easily pay a dividend that yielded close to 5%, but to me the overall health and attractiveness of the company would be increased by turning off the stock based compensation faucet.

Seems they're draining water out of the tub while leaving the faucet running.

[Roadmap2Retire]

Revenue is expected to grow 8-10% annually for the next five years.

Quote:"On QTL the short story is that the underlying market continues to grow," Mollenkopf said. "We are not participating in it right now to the degree we would like to, but once we resolve China we think we'll continue to grow in that area."

- Steve Mollenkopf, CEO of Qualcomm.

News article

Analyst Day Slides

[Roadmap2Retire]

If you have 2 hrs to kill, heres a video of an interview and talk from QCOM where details on the tech front are discussed. Gives you a good idea where things are headed both from a technology perspective (industry-wide) and how Qualcomm plans to break new ground and place its bets.

[Roadmap2Retire]

Samsung dropping QCOM chips from its next phone

http://finance.yahoo.com/news/samsung-dr...15881.html

[earthtodan]

I sold out of QCOM around the $73 mark. Maybe I've just been reading too much Warren Buffett (letters to shareholders), but I'm comfortable not holding any tech in my portfolio. Not necessarily against it, but comfortable without it.

[Roadmap2Retire]

I hear you. Sometimes if you arent comfortable with a company, you are better off not being any part of it and simply grab some popcorn and watch the show. The tech sector moves so fast ... doesnt take much for the hot trend to become a has-been.

I still have a lot of appreciation for the work QCOM does and think its a great investment over the long term. I will continue holding and am close to full position - so probably wont be adding.