I picked up an additional 1/4 of my target goal in QCOM today at $62 per share on what I consider an overreaction to supply shortages.
On the company call Qualcomm said they “are seeing very strong demand for the new 28 nanometer chips” and warned it didn’t have enough capacity. The constraints on 28-nanometer supply are limiting our potential revenue upside this fiscal year.”
While that is a problem, too much demand a good problem to have.
Factors influencing my additional purchase of QCOM
-QCOM pays an annual dividend of $1.00 and, at its current price, yields 1.61%
-Revenues rose by 42.6% compared to last years same quarter
-Net income increased by 123.2% compared to last years same quarter
-Qualcomm has a strong balance sheet, with $14.64 of net cash and investments per share.
-Credit Suisse has a price target of $75 per share
-Relationship with ALL wireless carriers and all key smartphone platforms including Android, iOS, Windows Phone 7 and BlackBerry
-The Street gives QCOM its highest Rating A+ stating”
“The company’s strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and compelling growth in net income.”
QUALCOMM Incorporated (Qualcomm) designs, manufactures and markets digital wireless telecommunications products and services based on its code division multiple access (CDMA) technology and other technologies. It has four segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); Qualcomm Wireless & Internet (QWI), and Qualcomm Strategic Initiatives (QSI). QCT is a developer and supplier of CDMA-based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning system products. QTL grants licenses or otherwise provides rights to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. In May 2011, it acquired Atheros Communications, Inc. In November 2011, it acquired all of the technology and other assets of HaloIPT. In December 2011, it formed Qualcomm Life Inc.