QUALCOMM, Inc. (QCOM) and Apple Inc. (AAPL) are both positioned well to meet industry challenges in the shift to mobility and the cloud, as both companies are trading a levels that have room for upside and offer up to 8% cash flow yields, says Eric Kallen, President and Chief Investment Strategist at Hayek Kallen Investment Management, LLC.
“We see technology as an industry in transition. The shift is away from the traditional desktop model to mobility and the cloud…We see this shift as taking place over time, and while it isn’t obvious who the winners and losers will ultimately be, we feel that buying great companies at good prices gives us the ability to position ourselves appropriately,” Kallen said. ”Two companies that we feel are well positioned to meet these challenges are Apple and Qualcomm. Both of these companies are well established in the mobility space, I think you could argue that one of them actually played a large role in creating it.”
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In addition to AAPL and QCOM‘s strategic positions in the move to mobile and the cloud, both companies are holding significant cash piles as well as offering decent dividends and considerable room for upside.
“They both have huge cash piles, offer very respectable dividends and are trading at levels that provide significant room for upside. Apple is trading at about 12.5 times earnings, less if you back out the cash, and offers an 8% cash flow yield. Qualcomm is a little higher, about 14.5 times earnings, but it has a very respectable cash flow yield of nearly 7%,” Kallen said.
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