Hi Allen,
In my calculations QCOM has a return on total capital of 12.4% and a cash yield of 6.8%. The estimated price is 59% of value.
To enter a stock I like the price to be 50% of value or lower. Starting with a LD-AIM machine, not buying a core holding, the first buy could be at:
$55- 0.15*55 ~= $47.
That would be a nice starting point for accumulation.
This all is just mathematics, no opinion on the stock itself, their management etc.
One stock I am looking at at this moment is NAVI(navient corp). It has a return on capital of 36.9%, a cash yield of 29% and is 9% of value. The dividend is 4.46%. PE is 8. Looking at their business they could be wildly impopular in the US, I can only look at the numbers and do not know anything about their business.
What do you think about NAVI?
Best, K
