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Alex Filonov
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I was born in 1956 in USSR. After graduation from college in 1979 I worked full-time as an IT specialist. Until 1990 I worked for different companies in the Soviet military industrial complex. I created a small software business in 1991, which failed in 1993. I worked for Oracle Corp in 1995 in... More
My blog:
Muddling Investor
  • Why I Sold Qualcomm 4 comments
    Jul 31, 2013 1:10 PM | about stocks: QCOM, AVGO, INTC, ARMH

    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
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Comments (4)
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  • dnorm1234
    , contributor
    Comments (1111) | Send Message
    Interesting view, thanks.


    I also hold a small position in QCOM and am hesitant about the future growth prospects. As you say, good company, but this industry is getting tougher.
    31 Jul 2013, 01:16 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3711) | Send Message
    I'm seeing the broader market fragile.
    31 Jul 2013, 01:22 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3711) | Send Message
    Any M&A potential?


    That is QCOM being acquired?
    31 Jul 2013, 06:26 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
    Author’s reply » Might be an antitrust issue. There aren't many players in this area.
    31 Jul 2013, 07:54 PM Reply Like
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