Qualcomm keeps its COO from going to Microsoft by making him CEO but there's a reason one strategist says the company is a buy.
Qualcomm has a new CEO and it may be Microsoft's loss.
The semiconductor giant named its COO Steve Mollenkopf as CEO, replacing Paul Jacobs who will stay on as Executive Chairman of the Board. Mollenkopf was considered to be on the shortlist of candidates to replace outgoing Microsoft CEO Steve Ballmer. Shares remained around flat on Friday.
However, Steve Cortes, founder of Veracruz TJM, believes the company has a bright future.
"Qualcomm has been a big winner; over the last six months, it significantly outperformed both the market and its sector of semiconductors," says Cortes on CNBC's Street Signs' Talking Numbers segment.
"As long as mobile grows, when you own Qualcomm, you don't have to pick which mobile provider is going to win over the other because they really benefit from all of them," says Cortes. "Rather than selling the physical chips, most of their revenue comes from licensing the technology that's put in almost most mobile phones."
Cortes also notes that licensing its over-70,000 patents makes up about two-thirds of Qualcomm's revenues. "This technology is a revenue stream that is significant and only going to increase," says Cortes. "On top of that, you get a dividend which you don't get in a lot of tech names. You get an almost-2% dividend yield on this stock. You don't have to pay a huge [price-to-earnings ratio] to get it. I think this is a winner that keeps winning."
JC O'Hara, Chief Market Technician at FBN Securities, says the charts agree with Cortes' positive outlook on Qualcomm, which trades around $72 per share.
"This was once a $100 stock," says O'Hara. "If these positive momentum trends continue, we might be looking at that number sooner than we think."
To see O'Hara's charts and Cortes' analysis of Qualcomm, watch the video above.
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