Q is for quality

Hello again dear readers!

The World Cup is still going strong but I thought I would say hello.

A few days ago I noticed the current Qualcomm (QCOM) share price. Under $40! QCOM under $40 feels like dollar bills going for 80 cents. QCOM has fallen over 25% in the bear market of the last six weeks, despite a guidance upgrade on the 13th June.

QCOM is not a household name but in the sphere of mobile telecoms it is a giant. It has an absolute monopoly on the CDMA technology that enables 3G mobile phones. Europe uses a different 3G variant to Verizon but they are both QCOM technologies.

As 2G gradually becomes obsolete the sales of 3G phones must accelerate in the near term. This is basically what QCOM announced a few weeks ago.

What do the figures look like? I estimate pro forma earnings of $1.70 for CY2006. That is a 2006 PE of 24. The growth in the last quarter year on year was 40%. Then there is a dividend yield of over 1% and an ongoing $2.5 billion stock repurchase program. The picture looks pretty rosy.

Ooops my time is up.

Come on England!