Qualcomm Inc (QCOM)

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Tech investor plugs Qualcomm, Oracle
September 16, 2005 05:02 PM ET

http://moneycentral.msn.com/content/CNBCTV/Articles/StockPicks/P129864.asp

The technology sector remains a good way to play the resilience of the U.S. economy, says Roger McNamee.

Economists are beginning to realize that Hurricane Katrina packed a bigger economic wallop than was feared. The pain inflicted by the storm is real, but the response is bound to have beneficial effects, said Roger McNamee.

"When the country gets focused on doing something very positive, that's always good news," McNamee said Friday on CNBC's "Power Lunch." "Katrina is going to help us shift national priorities in a much more constructive way."

McNamee is a long-time technology investor and co-founder of a private investment fund geared to new-media called Elevation Partners.

McNamee remains bullish on two trends in the technology sector -- mobility and enterprise software. He recommended stocks in each sector, which his company owns.



Quick Analysis

QUALCOMM, Inc.

• The company is a leading developer of wireless-chip technology. It pioneered CDMA (code division multiple access) technology used in cell phones and other wireless communications equipment.
• As the CDMA patent holder, Qualcomm derives royalties from licensing its technology to cell phone makers. Technology licensing accounts for one-third of company sales.
• Qualcomm is well positioned in the ongoing shift to newer 3G or third-generation cell-phone technologies that can transmit data at higher speeds, McNamee said.
• Prudential Equity Group reiterated its "overweight" rating on the stock and $48 price target on Aug. 29, citing a decision by Verizon Wireless to lower monthly fees for high-speed services. Prudential said other U.S. and European carriers would likely make similar moves, driving adoption of high-speed services and benefiting Qualcomm.
• Qualcomm insiders have been heavy sellers of company shares this summer. Insiders have executed more than 50 sales of Qualcomm stock in the past three months.
• The average brokerage recommendation on Qualcomm is moderate buy, according to Zacks.
• Qualcomm on Sept. 16 was rated 9 out of 10 on StockScouter.


RESEARCH IN MOTION LIMITED

• The Canadian company is best known for its BlackBerry wireless e-mail device, which accounted for about two-third of Research in Motion's revenue. About two-thirds of Blackberry sales are in the United States.
• In addition to making the Blackberry, Research in Motion provides an e-mail service to users of the mobile device. The company in June said there were 3.1 million BlackBerry users, a gain of nearly 600,000 in a three-month period.
• Nokia, the world's biggest maker of mobile phones, took aim at the Blackberry earlier this month with the launch of a service for business customers that will allow them to access their corporate-e-mail accounts from Nokia cell phones.
• Nokia's announcement was the latest by both prominent and upstart companies eyeing a market pioneered and long-dominated by BlackBerry, The Associated Press reported. With corporations paying monthly fees of $45 and more per employee, the mobile e-mail market stands as one of the more lucrative untapped opportunities in the wireless industry.
• ThinkEquity Partners, a San Francisco investment firm specializing in technology companies, put a "sell" rating on Research in Motion on Aug. 22. "Don't trade on rumors; RIMM's problem is the competition," analyst Pablo Perez-Fernandez wrote. "Competition from companies like Good Technology, Visto, Seven and Intellisync is likely to make it increasingly difficult for RIMM to maintain the margin profile it currently enjoys."
• The average brokerage recommendation on Research in Motion is hold, according to Zacks.
• Research in Motion on Sept. 16 was rated 6 out of 10 on StockScouter.


Oracle Corporation

• It's the world's biggest provider of enterprise software. Its products fall into two broad categories: database technology software and business applications software.
• The company has made a string of acquisitions in a bid for supremacy in the global market for customer resource management (CRM) software. It acquired rival PeopleSoft in January and earlier this month said it would buy Siebel Systems for $5.8 billion in cash and stock.
• Wall Street's initial reaction to the Siebel announcement was generally positive. "The company is solidifying its role as the industry consolidator," said Merrill Lynch analyst Kash Rangan, according to The Wall Street Journal. "It is rolling up competitors that are losing revenues and market share, but otherwise have strong customer bases, best-of-breed products, and vertical expertise. By undertaking its second major acquisition this year, Oracle demonstrates that it is has weathered the tech downturn," Rangan said.
• The average brokerage recommendation on Oracle is moderate buy, according to Zacks.
• Oracle on Sept. 16 was rated 8 out of 10 on StockScouter.