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San Diego telecom company Qualcomm reported today (Nov. 6) that earnings per share for the quarter ended Sept. 28 were 52 cents, down 22 percent from a year earlier. The company forecast 2009 revenue of $10.2 billion to $10.8 billion. Wall Street had been expecting $12.1 billion. Qualcomm forecast first quarter earnings per share of 46 cents to 50 cents on revenue of $2.3 billion to $2.5 billion. Analysts expected earnings of 61 cents a share on revenues of $2.9 billion. The stock dropped 6 percent to $33.05 and in after-hour trading continued falling to $32.39. On Sept. 19, the stock closed at $48.72. On Oct. 3, Qualcomm stock was at $40.50.

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With a Price Earnings ratio of 16 Qualcomm is still grossly overvalued. Qualcomm is fairly valued at between $12 and $18 per share. Qualcomm should trade at a low P/E ratio because it is a risky stock to own. The company's technology base is under relentless legal assault. One or two unfavorable legal rulings could cripple the company. GSM will become the gold standard for cell phone technology in the US, not Qualcomm CDMA technology. It's not entirely certain at this point that Qualcomm will be able to compete in a GSM world. Also, Irwin Jacob's advanced age is a major risk factor. There's no guarantee that Qualcomm will not be sold at an unfavorable price upon his passing in order to pay estate taxes.

Nov. 6, 2008

Looks like local firm Brandes is about to get hit again...this time with auto stocks. They are huge holders of GM and F. Wow, talk about bad picks. QCOM is a great short sale here.

Nov. 9, 2008

Burwell knows Qualcomm!

Nov. 10, 2008

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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