Qualcomm Tag

Qualcomm’s Competitive Advantages Are Too Numerous to Ignore

in Analysis

Asphyxiation is a condition in which the body doesn’t receive enough oxygen. A common side effect of asphyxiation is death. Before then, of course, there are hallucinations; we start seeing things that don’t exist. When the market is making new highs, valuations are high, and you get altitude sickness. It is typical to suffer from value asphyxiation: imagining value when it is not there. Mistakes in this environment predominantly come from the commission (not the omission) of buy decisions. That is why, before you commit your capital, you have to double-check your lucidity and think thrice. And that is why, when we stumbled on Qualcomm, we could not believe what we saw. The San Diego–based chipmaker should double its earnings over the next four years. It has an impenetrable moat, great management, a cash-laden balance sheet, infinite incremental return on capital — and it is cheap, trading at a low-teens multiple. These things are not supposed to happen to a company with a market cap of more than $100 billion that is followed by several dozen analysts — unless the Street is concerned that the company is on its way to becoming obsolete — and especially not while the market is making...

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"Vitaliy Katsenelson is the new Benjamin Graham."
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