Zeev's Turnips Patch-No Politics (ZEEV)

[phill]

Jeff, re QCOM: Maybe I'm wrong but I still am asking what's wrong with this picture???

1) There was no "fraud" involved - QCOM is pretty cautious about its accounting and determined to restate before somebody complained. Further, there's no long-term damage. It's the equivalent of a one-time charge. Earnings are simply pushed back one quarter, indefinitely. Cash flow is not effected at all.

2) QCOM's earnings, especially royalty earnings, are extremely high quality, with lots of room for increased margins with increased sales, (as the industry moves inexorably into 3G, which will vastly expand QCOM standards dominance), to offset the ever falling price of semis.

3) QCOM is the gorilla of wireless, and will command a MSFT-like premium until it starts to have MSFT's saturation problems - that eventuality, however, is many years away.

4) QCOM was little ahead of itself at $40+ - the chart said so. Zeev suggests a retrench to $34-$36 area before continuing upward path. Sounds right to me.

fwiw,

phill