 Hey everyone this is Dan with another episode of my QoCom videos. The last time I posted a video on QoCom it was about 3 months ago on July 25th. At that time I predicted that the stock price would go up from $144 a share to $160 a share by the end of October. Sure enough the price hit my target then went up even more. Today it's at $186 a share. Actually QoCom has gone up so fast in the last few days that it's probably approaching a short term blow off top. I'm glad that the fundamental analysis I did since the beginning of the year has proven to be correct. Is there more room for QoCom to go up even further in the next few months? My answer is a resounding yes. I will explain why. Let's get into the details. First of all let's reveal our price target that I posted last time. Even though my last video was posted on July 25th that was a technical analysis video. The fundamental analysis before that was done on July 17th and based on my fundamental analysis I set the target $160 a share to be reached by the end of October 2021. Back then the all-time high was $167.90. On July 16th the closing price was $139. As of yesterday November 17th QoCom closed at $183. Actually today November 18th QoCom closed even higher up at $186 a share. Certainly the stock price has been moving in the right direction and exceeded my target of $160 a share which is good news. Of course I'll be setting a new target. Let me talk a little bit more in the next few minutes about how I'm going to do that. Let's look at how the price has been moving in the last 2-3 months. This is a 6th month chart daily chart for QoCom. As you can see during this past 6 months QoCom went up by 43% certainly very impressive although most of the gain was accomplished in the last month and a half or so. If you look at the ETF representing the semiconductor industry SMH it went up by 34% pretty impressive but not nearly as impressive as QoCom and then QQQ representing the movement of NASDAQ 100 went up by 24% definitely not as good as QoCom and SPY representing the movement of S&P 500 went up by 13.99% almost 14%. Definitely QoCom outperformed the broad market and the semiconductor industry quite a bit. You see this jump here that's on November 4th when QoCom announced its quarterly earnings. Definitely their quarterly report was extremely impressive that's why we see the price jump here and ever since that time it's been going parabolic and at this point as of today we already see a small pullback so we might be seeing a short term pullback because we are basically at a blow off top. I'll talk about my short term trading strategies in the next few minutes also. First of all let's talk about a good news. This is a summary from MarketWatch about the QoCom quarterly report which is also the year in report because they end their fiscal year at the end of September of each year. Their net income grew by 74% to 9.04 billion dollars and the revenue increased by an impressive 43% to 33.57 billion dollars. Both of them way exceeded the analyst's expectations and that's why the stock price took off. If you look at their 10k report which is the annual report QoCom filed with the SEC for 2021 based on the different market segments, handsets occupied 16 billion dollars in change and in 2020 it was only 10 billion dollars or so and then you can look at the RF front end market, automotive market segment and internet of things market segment. If you break them down by percentage increases the handset market increased by 61% RF front end 76% automotive segment 51% increase internet of things 65% increase in overall revenue increase 64% these are all very impressive numbers that's one of the reasons why I'm so bullish about QoCom. Actually QoCom has been displaying this type of performances in the last few quarter except that they suffer from the lack of confidence on a part of investors and I'll explain why. At this point what's happening is that QoCom has overcome the stigma in the minds of the investors and that's why I believe the stock price is poised to take off. If you like what you've seen so far like to encourage you to click the like subscribe and notification button this will enable you to receive notification when I publish my next video it will also encourage me to publish more videos like this in the future. Thank you very much let's continue we have a lot to cover. In the 10k report QoCom also broke down their revenues and earning before taxes by these different segments the QCT QTL and QSI segment they represent the product segment the licenses primarily for the 5G patents that they own that they license to different semiconductor companies and anything they call the strategic initiatives. If I translate these actual dollar amounts into percentages we can see that they derive 80% of the revenues from products 19% from licenses that's 2021 the latest figure and strategic initiatives a very small percentage almost 0%. The last item reconciling items at 1% I'll explain a little more about that later and you can see the product percentage has been increasing from 2019 60% to 2020 70% to 2021 80% that's a healthy sign because one of the problems with QoCom previously was that because of the multiple lawsuits against them about how they did licensing that a lot of investors probably lost confidence in the company because they believed that the licensing revenues would go down at this point they're really increasing their revenue percentage from products and reducing their reliance on licensing income which is a good sign for the long term as far as earning before taxes again product percentages has been increasing from 29 to 48 to 76 the dependence on licenses went from 39% up to 60 last year and down to 45% now one item that got my attention was this reconciling items which is at negative 30% that's a very high percentage for a very vague description that's why I looked more into the footnotes in the 10k report and I found a definition of reconciling items they are all these unallocated expenses and if you are to allocate the negative 30% these are cost figures into the three categories products licenses and strategic initiatives based on their stated percentages here then you will end up with the product earnings percentage of 58% license percentage of 35% and strategic initiative percentage of 7% which is still an improvement from last year's 48% for product that means indeed they're making more income from product year over year that means they are getting to be very competitive with building products not just relying on licensing different semiconductor companies let's talk about some of the more recent events that have positively impacted Qualcomm first of all Qualcomm got a class action suit dismissed in a district court that's certainly good news and then as of last year they won a lawsuit against the US government about their licensing practice and as of March of this year it was reported that the US government is not likely to continue to pursue at a higher court these antitrust lawsuits against Qualcomm and that's definitely a very positive development although it took a while longer for the investors to be convinced that's why the Qualcomm stock price had been going down a little bit since August and then then went flat for a while and then picked up until most recently after November I'll talk more about that later but the recent movement in the stock price clearly indicated that the stigma built up by these lawsuits has finally been removed now we are seeing very positive momentum for the stock price and then a couple years earlier they won the settlement from Apple because Apple was suing Qualcomm for Qualcomm's licensing practice for their 5G product and finally they settled out of court and Apple was going to pay Qualcomm 4.5 billion dollars in the meanwhile Qualcomm as of July of this year acquired a company by the name of Nuvia and Nuvia has a very advanced design technology for computer chips that will enable Qualcomm to get into the laptop market which will enable them to compete head on with Intel as you know Intel has a very large piece of the market share in the PC and laptop market and hopefully Qualcomm will be able to generate a lot more revenues from the PC market in the near future that's definitely a very positive piece of news let's talk about the not so good news as I mentioned previously Apple announced as of December 10 2020 that they would be developing their own chips especially 5G modem chips although the chips will not be ready for production probably until 2023 and at this point it was estimated that about 20% of Qualcomm's revenue is from Apple and as we have seen already Qualcomm's revenues and profits have been growing at 60 70% a year and that's why eventually a 20% reduction is not going to be impacting the company's performance substantially so I'm not worried about this another piece of news that has not been too favorable for Qualcomm is that their market share in China has plunged because of the United States sanctioned against Huawei in the meanwhile MediaTek which is based in Taiwan and they produce less expensive chipsets for cell phones have taken number one spot although the chips produced by Qualcomm January can command much higher prices than the chips produced by MediaTek Qualcomm generally is considered to have some very high performance chips if you look at their market shares in the last few quarters you can see that MediaTek's market share has been growing very quickly and Qualcomm actually they gave up some market share in the cell phone processor market Apple has been losing market share also Samsung gaining some market share Huawei have lost a lot of market share primarily because of the US sanction against Huawei and that's a very important chart that I'll certainly be tracking rigorously in the near future let's summarize the competitive advantages of Qualcomm first of all they have more than 125g licensing agreements they definitely are the leader in the 5g area and they have a very successful series of processors that snapdragon 800 processors only they have the market leadership in 5g modem chipsets and they have the leadership in the gaming cell phone market and recently they settled a one many of the lawsuits and certainly the company has demonstrated very impressive increases in sales and earnings and all these positive factors finally looked at the cloud on top of Qualcomm the price is finally marching up to justify the excellent performances of Qualcomm as a company there are some disadvantages about a company we need to be aware of first of all they don't have their own foundry that means they rely on Samsung and Taiwan semiconductor to produce the chips in general but they are very smart that they have contracted both Samsung and semiconductor to produce the chips instead of relying on just one foundry and as we discussed already Apple will be making its own 5g processors probably it'll be ready in 2023 although it's occupying only about 20% of the revenues of Qualcomm at this point and of course media tax rapidly increasing market share that's very alarming actually I'll probably be posting a video on media tax very soon which is also a very good company let's talk about valuation first I drew these charts with better investing stock selection guide database system this is the picture of the revenues for Qualcomm since 2012 the black line is Qualcomm the green line here is Intel the market leader as far as market share for processors and then the blue line is the industry average the orange line is NVIDIA I use NVIDIA because NVIDIA stock price has been going up very quickly recently it has gone parabolic if you look at Qualcomm their revenues in the last year or so has been growing very fast actually ever since 2020 it's definitely faster than Intel faster than probably the industry average but not as fast as NVIDIA but almost as good then if you look at earning per share pretty impressive growth in the last couple years and 2018 even though the chart went to zero here but they didn't lose money that was a strategic move for them to adjust the income because they were bringing back profit from overseas due to tax changes in the US and that's why they had to do a tax write-off and actually they had pretty healthy profit also in 2018 without a tax write-off their EPS growth is almost as good as NVIDIA and definitely better than the industry average better than Intel in the last couple years if you look at this dotted line that's my projection for their EPS growth earning growth in the next four or five years I estimated that to be 30% and as you compare this dash line with the actual growth in the last couple years that's a pretty conservative estimate we'll be using this estimate later on return on equity definitely their return on equity has been very high definitely higher than NVIDIA the industry average as well as Intel that's a very positive sign debt to capital ratio they're pretty high at one point in 2018 since then they've been paying off their debt and it's been coming down steadily this is really accompanied with good profit good cash flow at this point I'm skipping the cash flow analysis because I don't think QoCom is in any danger of having cash flow problem therefore I don't want to waste time looking at cash flow mostly looking at earnings at this point here's my calculation first of all I look at the leading semiconductor companies and compare their trailing P ratio and forward P ratio as estimated by Yahoo Finance QoCom is here with the trailing P ratio of 23.5 whereas the average out of this group is 34 so the P ratio is pretty reasonable on the low side the forward P ratio Yahoo give them a 16.16 whereas the group average 24 my opinion is that I'm going to give them a forward P ratio of 18 which is very reasonable considering that things are really looking positive for QoCom and that's still lower than the industry average and I assume 30% annual earning growth remember a couple minutes ago we're looking at this chart that's how I drew the dash line that represented 30% earning growth with these assumptions and then I used the actual financial numbers for 2021 because they ended the fiscal year at the end of the third quarter of September and these numbers are already finalized these are the real net income figures as well as P ratio market cap and stock price and from these numbers and these assumptions I extrapolated their stock price for 2022 and 2023 and I got $240 for 2022 for stock price and through $113 of 2023 based on this range of numbers I decided to set my target at $240 to be reached by the end of January 2022 let's look at the other analyst opinions I'm comparing here the opinions from July 17 to today July 18 the price went up from $139 to $183 quite a bit of increase my target went up from $160 to $240 yellow business maintained a buy rating the high target went up from $200 to $393 average target went up also from $171 to $194 low target went up $134 to $160 tipbranks.com maintained a moderate buy rating high target went up from $225 average target went up from $172 to $193 and low target went up from $122 to $150 CM money maintained a buy rating high target also went up from $225 medium target $172 to $197 low target went up from $136 to $170 the street.com upgraded the stock from $8 to an A plus definitely a strong buy and the target went from $181 up to $221 overall we see a bunch of upgrades with price targets that's definitely a very bullish sign for Qualcomm and my target of $240 is a little bit on the high side compared to the other analysts but I'm not worried about that because it's not going to be the first time that I'm ahead of the professional analysts I'm pretty confident about Qualcomm being able to reach $240 by the end of January 2022. Let's look at the chart this is a daily chart for the last year as you can see it reached the nighttime high back in January and then it came down basically went flat for a while and then it finally shot up after the most recent quarterly earnings report which came out on November 4th since then the stock price has gone parabolic and I believe it will continue to go up although for the short term it's approaching a blow-up top and that's why if you look at for example the RSI value it's definitely very overboard at this point therefore I'm not going to surprise if the price pull back a little bit for maybe five six percent in the next few days or maybe at least going sideways for a few days and after that I believe the price will continue to go up when the RSI value gets down to about 50 to 60 I might be buying more shares I already bought some shares right on November 4th I'll talk about that later on if you look at the DMI indicator it's been bullish since November 4th actually a couple days before that MACD also has turned bullish around the same time and that's why I bought more shares around that time if you look at the hourly chart also very positive it's been going up and up in the last two three weeks we reached an overbought situation here and sure enough the price started to go sideways for a few days at this point on the hourly level it's the RSI is pretty reasonable although the daily chart the RSI value is too very high and that's why I won't be buying a lot more in the next day or so at least until the RSI number can go down a little bit and then if you look at DMI it's gone bullish since a couple days ago MACD also went bullish at about the same time although it has turned bearish as of yesterday and that's a bit alarming and that reflected the blow-off top situation here on the daily chart it's getting to be pretty high and also you can see that it exceeded the upper bolling japan at one point also today it hit the upper bolling japan that's a signal that the price might be pulling back a little bit just cool off for a little bit for a few days before it continues to go up again let's look at the support and resistance levels I drew this Fibonacci extension diagram using this point in the beginning of March as a minimum point and this point in the middle of January as a maximum point and for support the next level support will be a little bit below today's closing price of 186 so the support will be at 185 which is Fibonacci 50% and then the next level support will be 179 this red line here is Fibonacci 38% next level down will be 173 here Fibonacci 23% and next level down will be 164 Fibonacci 0% the previous all-time high daily closing price for resistance levels the next level up will be 189 this line here which is Fibonacci extension 61% next level up will be 196 Fibonacci 78% and next level up will be Fibonacci 100% at $205 let's recap my price target which is $240 a share to be reached by the end of January 2022 and today's closing price is $186.32 there's quite a bit of room for Qualcomm to go up according to my prediction as far as my strategies for the short term and for the long term first of all I've been holding some Qualcomm shares I bought back at least a year year and a half ago I'm sitting on some pretty nice profit at this point and I've been swing trading some of the shares now I'll be setting the trailing stop-call limit orders to protect my gains when the price starts to pull back in the next few days especially when we saw the diagram there for the daily chart that is approaching a blow off top so it's very likely that the price is going to pull back for at least two to three percent or maybe even five six percent in the next few days and if you don't know what trailing stop-call limit orders are I've added a link below this video in my youtube channel that you can click on to look at the explanation and then a few examples of these limit orders which are very nice tools to use for your brokerage account. Usually for swing trading I sell at a major resistance level or when the price fails to get support at a key support level or when the price pulls back after reaching a very high RSI value which is what's happening now or whenever news develops and I usually would buy more shares when the price bounces back from a major support level and when positive news happens which is what happened on November 4th that's when I bought more shares or when a daily RSI is less than 50% and if that happens in the next few days and if the company continues to look bullish which I believe it will I will be most likely buying more shares and I will update my subscribers by way of Twitter about my trades and about any significant news development about Qualcomm. At this point I'd like to remind you to subscribe to my Twitter account which is DanMarketL in addition to subscribing to my youtube channel for example on November 4th I tweeted that I bought more Qualcomm shares remember that's the day when they announced the earnings when I look at the earnings and I look at the market movement the stock price started to pick up that's when I jumped in I bought more shares as soon as then I sold half of what I bought that day but the remaining shares are showing a 20% gain which is certainly very nice and then on October 20th earlier I was actually predated November 4th I bought more ASML shares on a dip but in that I'm also looking at a 20% gain which is very nice I sold some of those shares but I continue to keep some of those shares November 10th after the broad market SPY and QQQ have been going up for a few days it started to go down by about 1% 2% that's when some of my limit orders got triggered and I sold shares of ASML, Qualcomm, TQQQ, TSM, AMD and LUV to lock in my profits but I still hold some shares of each of these stocks and then also November 15th I bought more Bioantech shares and at this point I'm looking at a 12% gain I've been sending all these messages to my subscribers on Twitter so if you're interested please subscribe to my Twitter account again I'd like to remind you to click the like subscribe and notification button as usual I will very much welcome your comments questions and suggestions at this point I'd like to remind you that I'm not a financial advisor I share my stock trading strategies and analyses for educational purpose only if you want to buy or sell stocks you should make your own decisions and you should certainly consult with your financial advisors before you do so this about wraps up my video for now I will chat with you again in the next few days in the meanwhile I'd like to wish you the very best of luck with your financial investments