Qualcomm (QCOM) — In continuing with the list of super bargains that offer the best chance for a quick recovery, this stock is a leader in developing products and services based on its advanced wireless broadband technology.
It was highlighted in the Top Stocks to Buy for October because it expects solid chipset sales throughout the coming year, and its Snapdragon chipset should provide an advantage in the wireless area over competitors.
The company has a strong royalty base in markets like China that are converting from 2G to 3G. Consensus earnings estimates for fiscal year 2013, ended in September, are $4.54 per share, and $4.96 is expected in fiscal 2014. S&P reiterated its 5-star strong buy rating and has a 12-month price target of $85.
I noted on the Top Stocks list that high-volume sell-offs like the one we saw in April have usually led to rebounds in the stock. QCOM had pierced its old high and appeared capable of continuing the move to my trading target of $76.
But the recent market decline resulted in a pullback to $65.47 on Wednesday, and further profit-taking could drive QCOM to our buy under price of $62 to $65. The trading target for QCOM remains $76, but long-term investors have an excellent opportunity for greater gains in excess of S&P’s one-year target of $85.