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Sumeet Vatsa

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  • The Data Effect: Seagate and Western Digital [View article]
    Exciting times call for sturdy decision making system. Read this -

    As a matter of fact I think WDC is a very good buy now with reward to risk ratio pretty high.

    Good Luck!
    Apr 5 02:16 PM | Likes Like |Link to Comment
  • 10 Companies Cheap By My Favorite Valuation Metric [View article]
    Interesting article but I havent seen many guys using FCF/EV. I use P/FCF as one of the many criteria while picking up value stocks.

    Some of these might be VALUE TRAPS rather than value stocks. Such as BBY & GME - These companies have outdated business models and unless they radically change their game plan, I think they will end up going the CC's way.

    Lastly, you spent so much time analyzing 10 companies, why dont you own some?

    Anyways good job.
    Apr 3 01:41 AM | Likes Like |Link to Comment
  • Intel, Texas Instruments Preferred Over Qualcomm Given Bearish Fears [View article]
    The DCF analysis is good but isn't this like comparing apple, orange and banana.

    Let's look at TXN aka Orange first -
    TXN is now primarily an analog chip company. It is shutting down it's baseband chip altogether. It's venture in connectivity chip hasn't been too successful. The firm's baseband chip customers include Nokia NOK and Research in Motion RIMM, both of which have struggled in the handset market in recent quarters. TI's OMAP processors, that run Kindle tablets and Droid Razr, havent really turned things around for TI.

    Just to put in perspective - TXN's wireless baseband chip business, which made up about 20% of revenue in 2008 will now make up only 8% in 2011.

    Also because a company trades at certain multiple doesn't make it expensive or cheap. Question is does the revenue and EPS growth lend support to the multiple.

    TI's revised forecast revenue range is $2.99 billion-$3.11 billion, down from the outlook of $3.02 billion-$3.28 billion announced in January 2012. The revenue is expected to decline 11% sequentially, versus the prior midpoint of 8%.

    Now let's analyze Banana - INTC .

    Intel is the dominant force in the roughly $30 billion computer processor market. It's Sandy bridge chip and the much anticipated Ivy Chip has left AMD in dust. But ARMH seems to have over powered intel when it comes to tablets and smart phones. In fact ARM powered tables are biting into Intel's lower end PCs.

    Intel's atom chip's success and integration of infineoin might take some time.

    Till then Apple rocks. By apple I mean QCOM -

    Mar 25 10:28 PM | 1 Like Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    Stick with QCOM. That;'s the best bet.
    Mar 25 03:01 PM | 1 Like Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    There are quite a few trends in tech industry.

    1. Smart phones.
    2. Faster and more efficient networks. - be it cable, internet or wireless.
    3. Cloud computing - There are lot of names a that are dabbling with this technology such as IBM, AMZN, RAX, CRM, etc. AMZN might be a good way to play it but I need to dig around.
    4. Big Data - The advent of social media has created huge amounts of data. The amount of data generated in last two years is equivalent to data generated from 2003 through 2009. The companies are trying to interpret the data in meaningful ways. One of the outcome of big data down the line will be use of customer specific advertisements, some what similar to Netflix's recommendations to each indiividual. The companies that are playing with Big data are IBM, AAPL, TDC, EMC, INFA, etc.

    Sorry for too much information. I get carried away sometimes.

    By the way good call on April 62.5 calls.
    Mar 25 02:59 PM | Likes Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    Yes you are right Mr Bargain. TXN is not the best bet in this case. The primary business of TXN is analog chips as CRUS mentioned earlier by bargain. They have different set of competitiors such as ADI, LLTC, SLAB,etc. The profit margin on these are low and the growth is no where close to smart phone industry growth.

    Best best is QCOM.
    Mar 25 02:43 PM | 1 Like Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    I agree Matias. This is a very competitive technology. These companies such as QCOM, BRCM spend millions on research. QCOM spent 20% on R&D and so did BRCM. But when they fail to come up with newer technology, they grow inorganically. QCOM bought ATHR last year.

    Similary BRCM to fill the void on 4G chips acquired Beceem. BRCM also forayed into networking chips by taking over Netlogic.

    So if in house R&D fails, good companies, which have billions in their coffers, acquire cutting edge companies to maintain their numero uno position.

    Please feel free to ask any question and visit my blog.

    Mar 22 02:18 AM | 1 Like Like |Link to Comment
  • 7 Hyped Up Stocks To Sell Short Now [View article]
    Sorry Sir. I didnt really mean that Discounted Cash Flow Valuation and Value investing per se is lame.

    But please don't insult Warren Buffett, Ben Graham, George Soros, etc by referring to P/E and P/B as Value investing. You have to be far more intricate and excessively meticuolous to be a value investor. Your write up doesn't even have the basic DCF to begin with.

    I dont have any grudge against you but you cant make statements such as above about any one.

    Good Luck. Mr. Value Investor.
    Mar 22 02:04 AM | Likes Like |Link to Comment
  • 7 Hyped Up Stocks To Sell Short Now [View article]
    It's the other way round. Trading based on P/E and P/B is a lame approach.

    According to me it's a time to buy LNKD with stop at 91$. LNKD has far more avenues of generating income then facebook.

    Also AmzN above 205$ is a buy. But again 190 should be stop in that case. Let's leave CRM untouched. BTW, CRM has always sported that P/E, even when it was 50$. So did LULU and UA.

    If you want to buy on basis of P/E and P/B, STX and BRCM. Good upside. Use DCF to find values not just ratios because a change in earning estimate will push those ratios off the cliff.
    Mar 21 02:42 PM | Likes Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    WACC = cost of capital = cost of equity + cost of debt

    Both cost of equity and cost of debt will vary on the basis of debt the company has on its balance sheet.

    A company with a debt/enterprise value of lets say 70% will have different cost of capital compared to d/ev of 5% or 1%.

    So the bottomline is Debt will impact the DCF, but it is not the only component effecting the valuation.

    Thanks for your input Tim.
    Mar 21 01:17 PM | Likes Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    It's 3-5% of per handset sold by OEMs such as Nokia, Samsung,etc.
    Mar 21 01:17 PM | Likes Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    You are right. I read it somewhere that QCOM was manufaturing ARM based chip for the latest ipad.

    Thanks for the information though.
    Mar 21 01:17 PM | 1 Like Like |Link to Comment
  • Qualcomm: Riding The Wave Of Smartphones And Tablets [View article]
    Just to let you know, I am electronics and telecom engineer and this is how it works -

    QCOM publicly introduced the concept that a digital communication technique called CDMA.

    CDMA and TDMA, of which Global System for Mobile Communications (GSM) is the primary commercial form, are the primary digital technologies currently used to transmit a wireless device user’s voice or data over radio waves using a public cellular wireless network.

    Many GSM operators deployed 2G mobile packet data technologies, such as General Packet Radio Service (GPRS) and Enhanced Data Rates for Global Evolution (EDGE) in areas serviced by GSM.

    Just to let you know - Although most major 3G systems are primarily based upon CDMA, time division duplexing (TDD), packet scheduling (dynamic TDMA) and packet oriented multiple access schemes are available in 3G form, combined with CDMA to take advantage of the benefits of both technologies. While the most popular form of the UMTS 3G system uses CDMA and frequency division duplexing (FDD) instead of TDMA, TDMA is combined with CDMA and Time Division Duplexing in two standard UMTS UTRA

    Following are the variation of each technology.
    FDMA - OFDMA, WDMA, SCFDMA (Frequency Divison Mutiplexing)
    TDMA - MFTDMA, STDMA (Time Divison Mutiplexing)

    There are WCDMA and OFDMA are few more technologies pursued by QCOM. WiMAX and LTE, which we see and hear more often, are predominantly OFDMA technology.

    Lastly an excerpt from 10K of QCOM - Qualcomm Technology Licensing Segment (QTL). QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing cdmaOne, CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA (e.g., LTE, WiMAX) standards and their derivatives. QTL licensing revenues are comprised of license fees as well as royalties based on worldwide sales by licensees of products incorporating or using our intellectual property. Royalties are generally based upon a percentage of the wholesale (i.e., licensee’s) selling price of licensed products, net of certain permissible deductions (e.g., certain shipping costs, packing costs, VAT, etc.). Revenues generated from royalties are subject to quarterly and annual fluctuations. QTL revenues comprised 36%, 33% and 35% of total consolidated revenues in fiscal 2011 , 2010 and 2009 , respectively.

    I this will clear some dust.
    Mar 21 01:16 PM | 1 Like Like |Link to Comment