Qualcomm (QCOM)

Revenues have escalated nicely, but earnings over the years has been very volatile. Although revenues are rising higher, there is significant volatility in earnings and margins keep changing. The biggest overhang is their litigious battle with Apple (AAPL-Q). Until that goes away, the overhang on the stock is going to be such that the stock could go lower or could go higher. Thinks they could ultimately sell, but it is definitely an overhang. He can’t see any upward catalyst and you just have to wait.

This follows the seasonality of most of the high-tech sector stocks. Last year, they had a pretty good move between the beginning of October, right through until January. We are not into the period of seasonal strength yet. The stock has not been doing too well at all. It has been in a downward trend and has formed a trading range between $50 and $53. As long as the stock stays above support of around $50, you are going to be okay.

A very volatile stock. They get royalty payments on their patents, and are having a dispute with Apple (AAPL-Q). As well as an issue of collecting royalties in other countries such as China. She doesn’t have a high visibility of their earnings and cash flow, so is not looking to enter this one.

The issue around its patent library is best summed up when you look at the difference between the revenue line and the earnings line. Revenues have gone up consistently, but earnings have not gone up with the same trajectory. That is a challenge, as it creates a margin squeeze. They have a lawsuit against Apple (AAPL-Q), which he doesn’t think will be resolved anytime soon. Ultimately, they could just cut Apple off which would cause a lot of pain to Apple. The semiconductor space is overdone and is very expensive. If he owned, he would be moving to the side.

In a scrap with Apple (AAPL-Q), which they go through every 3 years. If not Apple, it’s Samsung, Motorola, Nokia, etc. They have tremendous cash and a balance sheet to support whatever the outcome may be. Trading at 11X earnings and a near 4% dividend yield. They’ll benefit from cash repatriation if Trump is able to pass through his tax reform. There are also 2 other stimuli. 1.) You are about to begin a five-year upgrade cycle by the wireless carriers, which this company will be a beneficiary from. 2.) They bought NXP Semiconductors, which gives them foray into the car market, as well as the chip that is embedded in your credit card.

The global leader in wireless technology licensing. They have 2 businesses, licensing their wireless technology to other companies and producing conductor chips for the wireless area. The stock has been choppy over the last year. Apple (AAPL-Q) has basically stopped paying them, being unhappy with the terms. A good franchise, and with a pullback, this is good value here. 4.1% dividend yield.

A headline story, because they are being sued by their largest customer, Apple (AAPL-Q). They make chips which are mainly used in smart phones, but they also receive royalties for a patent they have, which basically divides and communicates the cell phone to a cell phone tower. Apple thinks they are paying too much. Looking at this on numbers, it is a great story and very inexpensive. High free cash flow yield and nice dividend. If they can settle things with Apple, the stock will do well.

Hold or sell? You have to look at the market every day by asking yourself how should you deploy your capital for today and into the future. In this case, you would ask yourself how is the $52 best deployed. In this case, not in this company. It has had some great success, but he questions where they go from here and are they controlling their existing space.

This had a big drop back in January due to the legal things that are happening with Apple (AAPL-Q), but they have started to recover. Thinks it will do well longer-term because of the type of space they are in. Their major product is chips that are geared towards phones for video play, etc. They are expanding by making purchases. Once the bridge with Apple is crossed, the stock should rebound more meaningfully. Pays a nice dividend of 4%.

He establishes levels where he will sell either half or all of the position (a stop loss system). He got stopped out some time ago. They are buying a Dutch semiconductor company, but it was clouded by the election. Now it seems it will go through. Most 3 and 4 G phones have a QCOM-Q chip in them. They are a dividend stock now. He would wait for some technical strength before entering the name.

This company is under fire. The US Federal Trade Commission just sued them for unlawful practices to maintain their monopoly. Apple (AAPL-Q) jumped in 3 days later and knocked $13 billion off. This company has the technology that all the cell phones in the world use, but now, if you want to buy their chips, you have to agree to a licensing agreement where you have to pay a percentage based on the value of the form that you sell.

He liked this until recently. They got slapped with a big fine in South Korea, and now a big lawsuit from Apple (AAPL-Q). Half of their revenues come from copyrights, but charged too much money for it, according to their customers. It is hard to predict how the lawsuit is going to go, and there may be others to fall from other clients. Hasn’t sold his holdings, but is a little reluctant to Buy into it because he can’t get any clarity as to what is going to happen. Dividend yield of 3.7%.

The stock dropped on a billion-dollar lawsuit from Apple (AAPL-Q), who they had been pretty friendly with. One of their friends is now no longer their friend and there is a billion-dollar situation which is not going away very soon, and there will be a cloud hanging over the stock for the next 6 to 12 months.

Held this in the past, but got stopped out in 2015. This has a relatively wide economic moat in that their chips are fundamental for a lot of telecommunication products. Appears attractive from a fundamental standpoint, but the stock price is suggesting otherwise. He would like to see some technical strength before wading in.

This had a good 2016. The whole management team has done a wonderful job over the years of keeping the company in the right themes in the technology atmosphere. Also, they really have embraced the concept of returning money to shareholders. The rate of dividend growth, double-digit percentage, will probably continue. Dividend yield of 3.2%.