Qualcomm Inc (QCOM)

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Qualcomm (QCOM) Has Risen 45% in Last One Year, Outperforms Market
By: Insider Monkey | September 24, 2020

If you are looking for the best ideas for your portfolio you may want to consider some of Spree Capital Advisers top stock picks. Spree Capital Advisers, an investment management firm, is bullish on Qualcomm Inc (NASDAQ:QCOM) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Qualcomm Inc (NASDAQ:QCOM) stock. Qualcomm Inc (NASDAQ:QCOM) is a semiconductor company.

In July 2019, Spree Capital Advisers had released its Q2 2019 investor letter. Qualcomm Inc (NASDAQ:QCOM) stock has posted a return of 44.6% in the trailing one year period, outperforming the S&P 500 Index which returned 9.2% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Qualcomm Inc (NASDAQ:QCOM) stock has risen by 26.8%.

In Q2 2019 investor letter, Spree Capital Advisers said the fund posted a return of 0.69% in the second quarter of 2019, underperforming fund's benchmark the S&P 500 Index which returned 4.30% in the same period. Let’s take a look at comments made by Spree Capital Advisers about Qualcomm Inc (NASDAQ:QCOM) stock in the Q2 2019 investor letter.

"Qualcomm contributed 2.29% to our 0.69% quarterly return. Our return in Qualcomm was the result of a costless option position we had put on ahead of the Apple trial. Ahead of the trial, the position represented 0.15% of fund assets.

We have followed Qualcomm for years, and we have followed the Apple litigation closely. However, April was the first investment we made in the company. It appeared to us that Apple had more to lose than gain in missing out on a new 5G phone release in 2020, as rival Samsung was set to launch the Galaxy S10 5G in May of 2019, and Intel’s 5G modem was proving to not be a viable option for Apple. It also occurred to us that Qualcomm’s business model was much less at risk than what the market had been led to believe. We believed that either Apple would settle out of court, or that Qualcomm would win in court.

When Apple struck a new agreement with Qualcomm, our 0.15% position, at that point in Qualcomm calls, returned 1524% and it became a 2.29% position. It is important for us to note that despite the fact that our thesis ultimately turned out to be correct, given that court trials and legal settlements are impossible to predict with over 90% accuracy (our base case requirements any time we make such a forecast), we were only comfortable with having a 0.15% position. We assessed the merits and risks of the position, and we adhered to our process."

In Q2 2020, the number of bullish hedge fund positions on Qualcomm Inc (NASDAQ:QCOM) stock increased by about 23% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Qualcomm's growth potential. Our calculations showed that Qualcomm Inc (NASDAQ:QCOM) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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