Qualcomm (QCOM)

Stock has moved a little sideways recently, but still trading above the 200 day and the 50 day moving averages. The acquisition of NXP was a good one and will be accretive to them. In smart phones, everything is going towards video, and that’s what this company is an expert in. Paying a pretty decent dividend of 3%. Not expensive. Trading at a forward PE of 14X, and probably growing at 9%-10%.

Sold his holdings about 1.5 years ago on a couple of concerns. In LTD, they controlled 95% of the market. Although that seems to be great, you have to wonder what is next. The other concern is their operations in China, and how royalties and licensing contracts were not being honoured.

Has been a buyer for quite some time. You have to look past 12 months, look at it on a 5-year basis. They acquired NXP, a big chip company, but QUALCOMM’s business itself derives their revenue 2 ways. 1) Sells chips in mobile devices and 2) leverages its platinum (?) portfolio and gets royalties off all wireless devices. It is getting to a point where there is going to be an inflection of an upgrade cycle to 4G-5G. When that happens, network operators have to improve their wireless networks, and this company benefits off of that. NXP has Near Field Communication, the backbone technology behind Apple Pay, Samsung Pay, as well as being the sensors on cars.

Likes their acquisition of NXP Semiconductor (NXPI-Q), but it won’t be closing until the end of 2017. This will allow Qualcom to diversify from the smart phone market that is slowing. They are losing share in Apple iPhone to Samsung, etc. Trading at a pretty decent valuation at about 13 or 14 times earnings, which is below market multiple at this point. Their growth rate is still not too bad at 8%-10%.

The semiconductor sector has done very well in the last 5 years, and we are now at a point where secular transitions are starting to occur. We are seeing a little bit of roll over. Feels that the big play moving forward is going to be in the analog space, and wonders if this company is really well positioned here. Wait and see.

This is currently in the period of seasonal strength, which is normally from around the 2^nd week of October right through until about the 1^st or 2^nd week in January. Technically, the chart shows a gorgeous upward trend. It is outperforming the S&P 500. Stick with this until around the middle of January.

This could be acquiring NXP Semiconductors (NXPI-Q), and if so he would see this going down in the short term. A very well-run company and they do meet his criteria, however he got stopped out in 2015 with the devaluation of the Yuan. They have a strong economic moat. The acquisition would be a good fit for them.

It has had a host of problems in the past. This past quarter it seems like their earnings have leveled off and they are heading higher. They are in merger talks with a semiconductor company (NXPI). It will be an accretive deal.

Basically makes the brains of a lot of computers and handheld devices. It has a 3.2% dividend yield. This company is not going away. However, what is the impact of Samsung, which has decided to retire and discontinue manufacture of the 7. There could be some impact. Wait for the next earnings call, or for them to be warn.

Semiconductors. This area has probably been one of the hottest spaces in the Tech sector so far this year. However, this one has been a laggard, but are in the process of potentially bidding on NXP, which is focused more on the Internet of things. He thinks this is going to be fine. Their legacy business has been attached to the cell phone business, but now that they are expanding into other areas, this will be a much more interesting company.

This has been one of the bigger beneficiaries of the whole cell phone revolution. They provide a lot of chips into the cell phones. With the slowdown maturity of the cell phone market, growth is starting to slow down. As well, they have some challenges in China. He sees the stock stagnating a little. A very well-managed stock, but won’t be growing like gangbusters. Dividend yield of 3.4%.

His #1 weight as a sector is technology because of Cloud, subscription based software and the Internet of things. This company has a pretty strong lock in hand sets. He likes semiconductors as a subset of technology, and this is one of the stronger performers. You could also own a basket of these through the SPDR Semiconductor (XSD-N) ETF.

Had owned this, but sold it at around $70 because of the China issues. That has gone quiet, but doesn’t think it has gone away. The business mentality in China continues to be what it was, and is difficult to predict. The company is going to have to constantly be worried about getting paid and if their licensing and intellectual property is going to be respected. Also, the latest version of their chips owns 97% of the market, so where are they going to go? There are rumours that some of the phone makers are going to switch over to an Intel (INTC-Q) product, which would give him pause.

(Market Call Minute.) He likes this. They are doing well with what is happening with their Snapdragon chip and they are doing well in China.

He likes chip companies because there is always a need for chips. There were a lot of violations of their patents in China and they are now going after those companies and should do better at getting their revenues.