Thursday July 05, 2012
by Geoffrey Seiler, editor BullMarket.comThere has been a lot of news swirling around Recommended List selection
Qualcomm (
QCOM) recently, as the company announced a new corporate structure that it says will help speed up product delivery and protect its patent portfolio.
Under the new structure, the parent company, Qualcomm Inc., will include its corporate functions, as well as most of its patent portfolio. It will then have a wholly owned subsidiary called Qualcomm Technologies, which will operate most of its R&D.
If the company thinks the restructuring can better protect its patent portfolio, we're all for it. The world is moving towards smartphones, and Qualcomm's IP on 3G and 4G wireless standards is like having a legal printing press.
While the near term could be bumpy given the supply constraint issues and some global economic weakness that is hurting smartphone growth, we believe Qualcomm is riding some very strong long-term secular tailwinds.
Meanwhile, the stock is inexpensive, trading for just above 10.5x fiscal 2012 estimates (ending September) of $3.75 and just above 9.5x the fiscal 2013 consensus of $4.14, excluding its net cash and total investments of about $14.65 per share.
We note that Cantor Fitzgerald started coverage of the stock today with a "buy" rating and $66 price target. We continue to rate the stock a "Buy," and likely will look to make a second purchase in the near future.
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