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   Technology StocksQualcomm Moderated Thread - please read rules before posting


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To: Art Bechhoefer who wrote (122704)11/6/2014 12:25:18 PM
From: waitwatchwander
1 Recommendation   of 176493
 
I calculated the cost of last quarters share buybacks from information in their press release at $77 per share . Given that we hit $72 right after the China issues became known, I was surprised their buyback price was so high.

Whatever method they use, they don't seem to do a very good job at buying back their shares at a good price.

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From: badger311/6/2014 12:26:15 PM
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The latest 10K indicates they anticipate borrowing money in FY 2015 in order to continue hitting the 75% goal (capital return/free cash flow) next year.

We intend to return 75% of our free cash flow to stockholders through stock repurchases and dividends over the foreseeable future, where free cash flow is defined as net cash provided by operating activities less capital expenditures. To meet this goal, we expect to use existing cash and marketable securities held by, and cash flow generated from, United States-based entities, and we anticipate that we will supplement this by borrowing additional funds in fiscal 2015. The requirement for and timing of such borrowing is subject to a number of factors, including the cash flow generated by United States-based entities, acquisitions and strategic investments, acceptable interest rates and changes in corporate income tax law, among other factors.

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To: waitwatchwander who wrote (122708)11/6/2014 12:32:47 PM
From: Art Bechhoefer
   of 176493
 
WWW -- I'm not sure that $77/share was the net cost of the buyback. If you sell a put option and later obtain the underlying shares when the option expires and the shares remain below the striking price, your cost will be the number of shares multiplied by the striking price. But what you received initially from selling the put option may be included elsewhere in the accounts. That is why it's not clear to me that $77 was the NET cost.

Art

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To: waitwatchwander who wrote (122708)11/6/2014 12:43:41 PM
From: slacker711
1 Recommendation   of 176493
 
I calculated the cost of last quarters share buybacks from information in their press release at $77 per share . Given that we hit $72 right after the China issues became known, I was surprised their buyback price was so high.


Whatever method they use, they don't seem to do a very good job at buying back their shares at a good price.


I thought that Keitel was great at picking price targets. With a new CFO, I am not sure that they are using the same opportunistic method that they used previously. Qualcomm's guidance now includes the impact of the estimated buyback in upcoming periods.

To me, that means that Q absolutely has to buy back shares on a regular basis....almost regardless of price.

It just crystallizes the fact that the buybacks are simply a cost of doing business for Qualcomm. Tens of billions of dollars spent and the share count is still a bit above where it was when Q announced its first buyback.

Slacker

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From: peterk11/6/2014 12:45:53 PM
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Qualcomm Shares May See Worst Day Since 2000 -- Market Talk
DOW JONES & COMPANY, INC. 9:33 AM ET 11/6/2014









12:33 EST - Qualcomm(QCOM) is poised to log its biggest dollar decline since 2000 in the wake of the wireless-chip maker's F4Q report. Down 11% at the moment, the $8.80 drop is the stock's biggest single-digit decline, topped by $10 and $12 slumps in early 2000 as the Internet bubble was bursting. The stock in July was at levels last seen then, but it sold off following the 3Q report, at which time QCOM first noted "significant issued" in China. Its 4Q results late yesterday were a bit light, and Raymond James says new-year "guidance showed continued flattish trends with regulatory and pricing risk, which we believe will keep the shares at their currently depressed valuation." On a percentage basis, this is QCOM's worst day since early 2010. (kevin.kingsbury@wsj.com; @kevinkingsbury)

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From: gutboy0911/6/2014 1:08:28 PM
   of 176493
 
Bank Of America Sees QUALCOMM As Determined To Lower Royalties


By Dwight Einhorn4 hours ago



In a report published Thursday, Bank of America analyst Tal Liani reiterated a Neutral rating and $85.00 price target on QUALCOMM, Inc. (NASDAQ: QCOM).

In the report, Bank of America noted, “This week we met with carriers, equipment vendors and regulators in Beijing, discussing the Chinese 4G market, demand for smartphones, and the sensitive issue of royalty disputes with Qualcomm. In short, the Chinese cellular market is booming, licenses are awarded, carriers are committed to 4G deployments, and 2014/2015 are expected to be the golden years for base station deployments and customer migration. However, we note that China's regulator and the local vendors are also reluctant to pay Qualcomm its standard royalty fee and see it as an inhibitor to growth. All participants commented on the anti-monopoly investigation, leading us to believe that royalty discounts are not a question of if, but only a question of when and how much. We reiterate our Neutral rating and highlight our key takeaways.”

QUALCOMM closed on Wednesday at $77.20.

Latest Ratings for QCOMDateFirmActionFromTo
Nov 2014Bank of AmericaMaintainsNeutral
Nov 2014Brean CapitalMaintainsBuy
Oct 2014Topeka CapitalMaintainsHold

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From: gutboy0911/6/2014 1:14:27 PM
   of 176493
 
Barclays lowered the price target to $80 from $85 for the American global semiconductor company and maintained its "overweight" rating.

The firm said that results and guidance were below Street estimates, and uncertainty on China royalty collections continues. Barclays said to expect clarity in two weeks at the company's analyst day.




"What went wrong this quarter could fill more than this page, but at the end of the day, the company expects collection issues to ease to some degree next year and in the meantime, the company holds roughly 1/4th its value in cash, continues to buy back stock at a good clip, and with the analyst day coming in 2 weeks we expect better clarity on its market assumptions and capital allocation plans," said Barclays U.S. Semiconductors analyst Blayne Curtis.

Sterne Agee set a price target of $82 for Qualcomm, and lowered annual EPS estimates to $5.24 from $5.96 for fiscal 2015.

The firm said it reiterated its "buy" rating of the company given challenges in China and Europe.

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To: Art Bechhoefer who wrote (122710)11/6/2014 1:32:02 PM
From: waitwatchwander
   of 176493
 
From their recent 4qtr earnings release ...

Return of capital to stockholders: $1.90 billion, including $1.20 billion through repurchases of
15.6 million shares of common stock and $702 million, or $0.42 per share, of cash dividends paid.

$1.2B divided by 15.6M equals a share price of $76.92. If this isn't right, someone should tell them they need to fix their press release before someone with a bit more savvy takes note. The last thing we need now is a class action law suit claiming the release of misleading shareholder information.

You likely hit the head on the nail with your put strategy purchasing theory and the puts that got exercised last quarter were likely sold before the public announcement of the current China fiasco.

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From: JeffreyHF11/6/2014 2:04:06 PM
13 Recommendations   of 176493
 
So, we're now selling for about $48/share, plus $20/share cash, and no debt.
Some private equity guys might take notice.
Also, given the licensing pressures coming from multiple directions, one wonders whether thought is being given to separating the chip business from the patents.

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To: JeffreyHF who wrote (122716)11/6/2014 2:40:44 PM
From: The_Net
   of 176493
 
If QCOM put the company thru a strategic-alternatives process, this stock will instantaneously jump

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