If you look at a stock screener, you will see that Qualcomm (QCOM) stock currently trades at a P/E ratio of 20x earnings. For instance, if you type in “Qualcomm stock quote” into a Google search, you will see that Qualcomm closed on September 30th at $68.50 per share and has a P/E ratio of 20.08. I attach a screenshot below.
This assumes that Qualcomm’s twelve-month earnings are $3.41 per share, and this assumption is incorrect because it dramatically understates Qualcomm’s earnings power. In late 2015, Qualcomm launched a significant layoff constituting 15% of its workforce. I don’t like it when companies simultaneously brag about their corporate responsibility while getting rid of thousands of people in the pursuit of billions of additional profits, but I would not be able to cover the investment arena if an unqualified moral endorsement were an antecedent condition to investing. And plus, a fair analysis … Read the rest of this article!