Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Why I Sold Qualcomm

|Includes:ARMH, AVGO, INTC, Qualcomm Inc. (QCOM)

I closed my Qualcomm (NASDAQ: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?

Because 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 company.

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 it:

1. Saturation of smartphone market. People, at least most of them, don't pay $600 for a smartphone anymore. Myself included.

2. 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 (NASDAQ: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 (NASDAQ:ARMH).

Disclosure: I am long ARMH.

Additional disclosure: I don't have any positions in other stocks mentioned. Positions can change any time.

Stocks: QCOM, AVGO, INTC, ARMH