I closed my Qualcomm (QCOM) position yesterday. This is a tough case. On the surface, company is great. Last quarter report was outstanding. Profit is good and growing. Dividend is over 2%. Why selling?
I'm buying stocks for one reason and one reasong only: to make money.
Never falling in love with any stock. Never confuse a stock with a
Now, about negative things. Qualcomm the stock currently
is below the year ago price. So, revenues and profits grew, dividend was
successfully paid, and stock went (albeit slightly) down. Why? Because
all suppliers of mobile components stagnated. There are two reasons for
1. Saturation of smartphone market. People, at least most of them, don't pay $600 for a smartphone anymore. Myself included.
Competition is fierce. As a result, margins tend to be low, and
smartphone producers change suppliers on a fly. Sometimes Broadcom
(BRCM) beats Qualcomm, cometimes it the other way around. Everybody
waits for Intel (INTC) to enter this market.
My feeling is there
is no growth in this stock, or any other supplier of smartphone
components. The only related stock worth holding is ARM (ARMH).
Disclosure: I am long ARMH. I have no positions in other stocks mentioned. Positions can change any time.