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Mid-Week Update 03-03-10

Qualcomm (QCOM), the newest addition to the Growth Portfolio and a part of our FundFinds Portfolio, is a tech franchise whose business revolves around wireless technology, in particular, CDMA, the heart of the new generation of cell phones. After posting disappointing earnings guidance in January, the company had some goods news this week.
 
The semiconductor company announced that its board authorized the new buyback worth $3 billion. This replaces the $2-billion buyback plan, $1.7 billion worth of shares from which have already been repurchased by the company. In addition, Qualcomm will increase its quarterly dividend by 12 percent to $0.19. Investors, as a result, will be receiving $134.4 million more per year from the company.
 
Moreover, the company provided a more optimistic business outlook. While back in January, Qualcomm’s CEO, Paul Jacobs, offered a fairly pessimistic view of the company’s prospects for the year, it seems conditions may be improving. Now, the company expects both the revenues and profit for the second quarter to approach the higher end of the earlier forecasts.
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Mid-Week Update 02-03-10

In Monday’s Market Update, we highlighted the few information technology companies that we feel qualify as franchises. With one exception, all of those companies are represented in our Growth Portfolio. Today, we add Qualcomm (QCOM) to the portfolio – completing our technology franchise portfolio.
 
As we noted, Qualcomm’s business centers around patents regarding wireless technology, with many related to the CDMA mobile communication platform. In fact, over 25 years of research and development have translated into a portfolio of approximately 11,600 U.S. and 54,100 international patents and patent applications. Qualcomm has become a technology supplier to myriad companies, providing either the semiconductor chips or licensing its technology for a fee, with the company’s business model being to provide wireless companies big and small with the know-how needed to bring their innovations to the market. We think they’ve succeeded in that quest, and are reaping the benefits of decades of hard work.
 
The CDMA platform is front and center of the shift to third generation or 3G wireless communications, a platform supporting faster speeds for larger packets of data.
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Market Update 01-25-10

 
Short-Term Key: Negative
Long-Term Key -90 (Negative to Neutral)
 
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Inside this week's update...
 
***** 4 high-potential Chinese stocks.
***** Real estate bubble or joint venture financing?
***** Top funds geared to China's growth.
***** Move over Wal-Mart, make room for Wumart.
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Speculation continues to run high on the issue of whether China is experiencing a bubble that threatens investors. Chinese real estate looks hugely overpriced and manufacturing capacity (according to some) has run far in excess of potential demand.
On the political front, an argument has erupted between the Chinese government and Google. Google claims China hacked the email accounts of some of its customers, who coincidentally were human rights crusaders.
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Mid-Week Update 10-21-09

Earnings season is well underway with about a quarter of S&P 500 companies having already reported. The results, helped by favorable year-on-year comparisons, have been largely impressive so far, with over three quarters of announcements coming above expectations and less than 15 percent falling short.
 
We have only had a few of our holdings report thus far – but we haven’t suffered from any disappointments. As we discussed last week, Intel (INTC) had a blowout quarter – beating its own revised expectations, as well as consensus estimates. The semiconductor giant’s quarter was helped by strong back-to-school revenues – the same type of sales that helped push consumer technology powerhouse, Apple Inc. (AAPL), to another record-setting quarter.
 
In its earnings announcement after the market’s close on Monday, Apple reported its most profitable quarter ever with net income totaling $1.67 billion – a 47 percent increase over last year. The record profit translated to $1.82 earnings per share, obliterating the company’s own guidance of $1.20 a share (which is admittedly always conservative), and easily beating consensus estimates of $1.43 (the highest estimate, at $1.66 was actually well short too).
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Mid-Week Update 07-15-09

Finally, some positive news. The world’s largest semiconductor company, Intel (INTC), which we profiled here just two weeks ago, reported blow-out earnings last night – and the stock reacted very positively today. During the second quarter, the company collected just over $8 billion in revenue, better than the $7.3 billion analysts were expecting. And they did this as they drew down their own inventories by $420 million.

Further, the company’s gross margins expanded from 46 percent last quarter to 51 percent in the one just completed. The company reported a net loss for the quarter of $398, or 7 cents a share due to a $1.45 billion antitrust fine levied by the European Union. Excluding this one-time item, which may even reverse itself if Intel wins its appeal, the company earned 18 cents a share – more than double expectations of 8 cents.Read more...

Mid-Week Update 07-01-09

An impressive quarter is now in the books. The second quarter of 2009 saw the S&P 500 rally almost 16 percent, its best quarterly return since 1998. Of course, this is on the heels of the sharpest market downturn in 80 years. Despite the rally, which took stocks deserving and undeserving alike from cheap valuations, there are still some bargains to be had.
 
Case in point is one of the most dominant companies on the planet – Intel (INTC). Intel is the leading semiconductor chip maker, with a global market share of approximately 80 percent. The company manufactures microprocessors, chipsets, flash memory and motherboards for computing and communications products under two business segments: the Digital Enterprise Group and the Mobility Group.
 
In Fiscal 2008, the Digital Enterprise Group accounted for 56 percent of the company’s $37.6 billion in total sales. With chips for desktop computers, servers, and enterprise applications, the group boasts high margins, and account for nearly three quarters of Intel’s annual profit of $5.2 billion. Meanwhile, the Mobility Group, with products for notebook computers and netbooks accounted for most of the remainder.
 
The Mobility Group is also an area in which Intel is concentrating on growth – centered on its new Atom processor.
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