Nasdaq---Julie (slow)
Qualcomm
Interview: Transamerica Investment Services---Van Harte, Jeff---Fund Manager
>> all right, folks. we talk about the nasdaq today and let’s get the latest from julie hyman at the nasdaq market site in times square.
>> well, the nasdaq did close at the session highs today. it ended the day up 1% at 1974, though as is typical of this holiday week, we are seeing lighter than normal volume. the volume at about 73% of the three-month daily average. however, we did have higher volume, interestingly enough, higher than yesterday. however, this is the last full trading day of the week, so volume will certainly be lower on wednesday and friday. really the biggest story stock of the day on the nasdaq was research in motion. this stock gaining about 51% in today’s session. it was the biggest percentage gain ever for the stock ever since it began trading―or the a.d.r.’s, i should say, began trading in 1999. it is a canadian company and the maker of the blackberry wireless device. record trading volume for that stock today. the third quarter earnings came in ahead of analysts estimates and the fourth quarter and first quarter estimate coming in ahead of analysts estimates. after that at least six analysts today actually raised the recommendation on the stock . now, to give you an idea of what we are talking about here, the fourth quarter profit estimate was for as much as 40 cents a share, excluding some costs as much as 5 a cents a share, definitely beating the thomson financial estimate of 22 cents a share. also, wanted to take a quick look at online shopping stocks because they were doing quite well today, mainly ebay and amazon. ebay did close at a record high today. gained 1.7% in today’s session. not a huge gain, but it is at a high for the stock . amazon gaining 5.2% in today’s session. now, a lot of folks on wall street watching the stocks closely during the holiday season because they’re expecting the returns to be fairly positive from online shopping companies. back to you.
>> ok. moving on here, we have been talking about parmalat today. italy’s largest food company says it plans to file for bankruptcy protection, and this as bank of america today filed a criminal complaint in connection with an italian government investigation into the company’s accounting practices. bank of america last week contested documents claiming that parmalt had a $4.9 billion account with the bank. people close to the investigation say parm lat is now unable to document for $11 billion of funds listed in the accounts. parmalat’s troubles brought to mind a similar corporate scandal in the u.s.
>> an overall issue for europe, which was a claim that enron couldn’t happen here or any major accounting problems, and of course, we have ahold and all this, and so i think it is a warning shot overall for european companies.
>> italy’s finance minister last week called parmalat “a european enron.” one of the auditors calls parmalat’s records “reckless.” the next guest says even though he doesn’t make big industry calls, he is bullish on media stocks like broad-based digital stocks . jeff van harte heart joins us now from san francisco. talk to me here. i understand you likened growth and overvalue, but not technology. that has to be difficult, no?
>> well, it’s not too difficult. a lot of technology stocks , i think, are priced pretty high. so we always see that and we like to stay away. and i guess you could call this growth reasonable price, but whatever we do, we rate valuation pretty high when making an investment decision.
>> one of the stocks you like i, and own i need to disclose, is qualcomm. what is the story there? you are not worried that the stock has risen 47% this year and trading at 32 times next year’s estimated earnings?
>> yeah, well t thing for qualcomm is it’s just in the beginning stages of addressing worldwide market as opposed to just the cdma market or co-division multiple access, so that will take them from a current user base of 100 million to 150 billion as the year’s out. the stock is up and recognizing some of that. we think the real inflection point of growth is about to start for the company over the long run.
>> a lot of people have more or less put the market to bed for this year with the waning days of trade. what is your forecast for next year? i know you told our producers you feel the market is “fully recovered this year.” what do you mean by that and where are we headed?
>> well, i think valuations reflect a lot of the economic recovery. and we feel good about the economy next year. but again, i think prices have somewhat recognized that, and i think earnings will be good next year. it doesn’t take a real strong economy to really grow earnings because a lot of u.s. companies have cut expenses. we do think, again, pretty much in the price and if we have a good year next year, maybe high single digit returns. we think that’s pretty good in a one or two percent inflation environment.
>> we only have 20 seconds left. where would you―what sort of percentage return would you expect for the s&p 500 next year? 15 seconds. i apologize.
>> ok. yeah, just you get a couple of point, maybe a point for the dividend yield and then seven or eight percent price appreciation, which should about approximate earnings.
>> all right. jeff van harte, senior investment partner at trance trance. at transamerica.
>> coming up, the steps that the chinese government is taking to cool―that’s right, folks -- cool and slowdown industrial expansion.
