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发帖数: 349 | 1 Multiple Key Insider Purchases May Be Signaling a Bottom for Qualcomm
有谁敢抄底吗？
After peaking at $80 per share last year, Qualcomm (QCOM) has had a rough go
with the stock down over 30%. Qualcomm management had to deal with multiple
challenges including an investigation of licensing business practices by
China and the loss of Samsung Galaxy S6 smartphone business.
However QCOM remains the dominant IP force in mobile phones and virtually
all mobile phone manufacturers who use 3G or 4G technologies have to pay
royalties of 3% to 5% per phone to QCOM. This stream of royalties will
remain for many years to come. Qualcomm also spends over $5 billion a year
on R&D ensuring that it will continue to build its technological moat.
One of the greatest investors of all time, Peter Lynch, has said that "
insiders might sell their shares for any number of reasons, but they buy
them for only one: they think the price will rise." For the first time in
two years, multiple key insiders have stepped up to acquire shares of the
company at market prices. The CEO, CFO and a couple of directors have
acquired shares.
Source: Gurufocus.com
In addition, QCOM's dividend yield has reached 3.2% . Recently Qualcomm
issued $10 billion in debt to buy back stock. This should put positive
pressure on stock price in the months ahead by reducing the company's float.
The report indicates that the company issued the debt in eight parts. Two
floating rate notes of $250 million each are due in 2018 and 2020. The fixed
rate notes have interest rates ranging from as low as 1.4% on $1.25 billion
due in 2018 to as high as 4.8% on $1.5 billion due in 2045. This compares
favorably with a cash return of 5.9% which the company generates from
operations. The $10 billion debt is not really debt but balances out cash
held abroad, so even after the debt issuance, QCOM will remain essentially
debt free on a net basis. Plus most of this $10 billion is coming back to
shareholders. Qualcomm has bought back almost 9% of its stock in the past 12
months.
All this would indicate that QCOM stock should be good value in the medium
to long term.
As evident from the table below (sourced from Morningstar.com) Qualcomm's
stock is currently trading at or new 5 year low multiples.
Conclusion
Qualcomm stock appears to be a excellent buy at an excellent price, further
validated by multiple inside purchases and supported by company stock
buybacks.
This article first appeared on GuruFocus.
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