 |
QualcommPosted by Randy on: 2005-11-10 16:08:16 in category:
Investments [ Print | Permalink / 0 Comment(s) ] November 12 2005 Qualcomm ( QCOM 44.77) To recieve our free Monopoly Investment newsletter just e-mail your name and day time phone number to rdurig@durig.com Data must be complete Qualcomm had a good quarter, a very strong 2006 forecast, profit margins have stabilized, and the outlook for next calendar year was impressively strong. With the economy growing at around a 3%, a forecast of 23%-27% growth in pro forma PROFITS per share is very strong; especially for a company of Qualcomm's size- around 73 billion in market capitalization. . WCDMA royalties are now around 41% and growing nicely. Qualcomm is now forecasting almost 100% growth for the WCDMA units for 2006. Supper cycle The migration of the world's largest platform (cell hones) and one of the world's fastest growing technologies (the Internet) has tremendous potential. Based upon our monopoly theories, the companies that are able to exercise the greatest degree of control utilizing new technologies should have a tremendous return for it's shareholders. It appears Qualcomm is in the sweet spot for this very large technology shift. The WCDMA and/or GSM 3G based on history should, in my opinion, become mainstream about this time next year if the 3G solution has an adoption rate similar to other new technologies. The mass adoption rate, often referred to as the "S curve", should greatly accelerate. Based on history, once a technology like 3G achieves 15% market share, the migration could accelerate until it hits around the 50% market share. It appears 3G could greatly accelerate its adoption in the calendar year of 2006. Please read several articles available free to registered readers on http://www.durig.com. In 2001 we were forecasting a super cycle for Qualcomm and it appears that the probability of this event occurring has greatly increased since our article was published. . The anti trust or monopoly lawsuit. It appears to me that the leaders of the current lawsuit have, for about the last ten years, been trying to slow the migration of CDMA technologies. Since this strategy has failed to stop the migration, these companies are now positioned well behind the technology growth curve. The management of these companies are saying it is unfair simply knowing they have been losing technology leadership for years and this is a simple (the anti trust lawsuit) approach they have left to try. It is my opinion the marketplace will vote with their dollars, identifying the real leader, well before the courts provide any clarity. I hope the company that leads technology wins, not the one fighting it. With that in mind, it appears that this case will last many years and the anti trust group has a probability of winning even tough we believe it's unlikely at this point in time. Problems. China is not growing well and its causes appear very political. The good news is several Chinese companies appear to be signing with QCOM and are not waiting for the official Government based programs. Since this is the worlds largest market, it is too bad that they have a similar approach (stall the market until their internal product can compete) as the anti-trust group and are falling well behind the technology curve. Biggest threat Until there is real clarity in G4, or an agreed upon standard, the ability for one company or companies to achieve a superior position is very unclear. If a major technology shift occurred away from the CDMA and now OFDM from Flarian standard, Qualcomm would in my opinion loose their golden goose. Conclusion, I believe the 3G technologies are close to a very large migration, possibly starting as soon as 2006. With this great migration, I believe today even more than the last few years that Qualcomm is the best company to benefit and even dominate this very large market. If the migration to 3G does accelerate, in my opinion, Qualcomm could benefit for a second time at an outstanding level. If they achieve this, they will only be the fourth company to achieve a Modern Monopoly Effect (Please read the theorem main page http://www.durig.com since I have followed monopolies in my last twenty years. Disclosures: I have owned Qualcomm in my portfolios for many years, and presently own it in the discretionary portfolios and my personal account. Past performance is not a guarantee for future returns. Durig Capital LLC may only do business if registered in your state. Durig Capital is a registered investment advisor. You can contact us toll free at 877.359.5319, or http://www.durig,com or contact Randy at rdurig@durig.com Please see the new announcement about Durig and Ameritrade at: http://www.durig.com/ameritrade Durig Capital National Performance Rankings: # 8 U.S. Equity, Large Capitalization Blend, Ranked by 3 year annualized returns, 2nd Quarter 2005, By Money Manager Review #3 U.S. Equity, Large Capitalization Blend, Ranked by 1 year annual returns, 1st Quarter 2005, By Money Manager Review #2 U.S. Equity, Large Capitalization Blend, Ranked by 1 year annual return 4th Quarter 2004, By Money Manager Review Open community website http://www.business-business.biz http://www.investment-investment.us http://www.retirement-retirement.com Recommended sites To design your custom retirement plan. http://www.retirement-plan.us For planning an IRA rollover this is the site to review. http://www.ira-rollover.us For professional asset allocation and the wonders it can do. http://www.asset-allocation.us Managers selected to fit your needs. http://www.money-managers.us Top rated manager http://www.durig.com |
|
Post new CommentThis site does not allow anonymous comments. Registered members can login to participate. Registration is free and takes only a few seconds |
|