Friday, April 23, 2010

Tech Stuff

Huge quarter out of RMBS. The stock is acting like AAPL did in the mid - $140's-150's and look at AAPL now. A similar move out of RMBS would get the stock to the $50-60 area which I expect.

Speaking of AAPL, no, I'm not surprised by the move. At $245 the stock had a forward PE of 13 if you stripped out cash which I've highlighted numerous times. That, along with a forward PEG of .35, made it one of the cheapest growth stocks on the planet. I'll reiterate that I think the $245 level would be the new gift level, though I may have to raise that price point.

I added more QCOM yesterday. I think the move lower is preposterous! They always offer low guides. Even so, QCOM did actually raise FY guidance, something they rarely do. While not the best chip stock on the planet, it's in the lexicon and it's becoming the cheapest as very few people look at balance sheets anymore. Bottom line: QCOM is trading at 3 times cash and that again is ludicrous, given the future catalysts as well as consistency of cash generation.

PMCS is another name with a good report that I expect will move materially higher. They are starting to look like MRVL did about 3-4 quarters ago. The same is setting up for PMCS and this is just the environment where it could find itself with bidders at the door if the stock stays this cheap......

long AAPL; QCOM