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Is QUALCOMM (QCOM) A Smart Long-Term Buy?

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Jose Karlo Mari Tottoc
·3 min read
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Alger, an investment management firm, published its ‘Alger Spectra Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in Information Technology and Consumer Discretionary sector, with their comments on notable companies. The Communication Services sector together with the Industrial sector is where they achieved the largest chunk of their returns. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Spectra Fund, in their Q4 2020 investor letter, mentioned QUALCOMM Incorporated (NASDAQ: QCOM) and emphasized their views on the company. QUALCOMM Incorporated is a California-based semiconductor company that currently has a $149.5 billion market capitalization. Since the beginning of the year, QCOM delivered a -13.59% return, but its 12-month gains are massively up by 104.16%. As of March 15, 2021, the stock closed at $131.64 per share.

Here is what Alger Spectra Fund has to say about QUALCOMM Incorporated in their Q4 2020 investor letter:

"Qualcomm is a leading semiconductor company with strong positions in telecommunications end markets that position the company as a primary beneficiary of the innovative 5G network standard rollout. Qualcomm is commonly acknowledged as having the best technology specs for 5Gchipsets as evidenced by signing up all 75 major original equipment manufacturers of telephone handsets including Apple. Additionally, beyond handsets, Qualcomm is positioned to generate growth from automobile manufacturers, the Internet of Things, gaming and other markets.

The shares contributed to performance because Qualcomm's earnings beat expectations in the face of coronavirus driven declines in the broad handset market. Importantly, the market is improving as the magnitude of handset declines is diminishing sequentially. Qualcomm's fundamentals are benefitting from a faster-than-expected shift to the 5G standard. As such, the company's 5G guidance exceeded expectations."

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Our calculations show that QUALCOMM Incorporated (NASDAQ: QCOM) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, QUALCOMM Incorporated was in 85 hedge fund portfolios, compared to 87 funds in the third quarter. QCOM delivered a -10.01% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.