Forget Trump – This "Value Play" Stock Is a Long-Term Buy

Tom Gentile

We all know what happened in the stock market last week.

And while it seems as though volatility isn't quite over, that's not what I want to talk about today.

Instead, I want to focus on a company that's found itself in a center-stage battle with President Donald Trump himself.

This company is one of the most valued companies in the world when it comes to patents.

It's got royalties coming in from all over the world.

And it's not Amazon.com Inc. (Nasdaq: AMZN)…

Why Qualcomm Is Still a Long-Term Buy

Broadcom Inc. (Nasdaq: AVGO) was on the final leg of its campaign to take over one of the largest chip makers in the world, Qualcomm Inc. (Nasdaq: QCOM), in March…

But this plan quickly went off the rails, as Trump stepped in and blocked the deal, ending the impending partnership.

For Broadcom, this has been a long and tedious process filled with offer after offer, which Qualcomm denied – and Broadcom was on the edge of its seat, even considering shaking up Qualcomm's board of directors to make the merger more promising.

And just 48 hours before the shareholder meeting was supposed to take place to determine if the merger would happen, Trump halted the progress, claiming it would raise many national security concerns.

But this isn't the first time Qualcomm has found itself at the center of a media frenzy.

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You see, Qualcomm's patent library is considered one of the most valued in the world. It receives a royalty on every phone that has its chips inside.

And this has put it front and center for scrutiny.

For instance, A few years back, China filed an antitrust suit against Qualcomm, renegotiating its royalty rate and fining them close to a billion dollars.

On top of this, Qualcomm has a history of licensing fee battles. For example, Apple Inc., in one of its recent legal findings, claimed that Qualcomm acts like a "patent troll."

This turmoil has caused most investors to run the other way – and in turn, most financial advisors have sent out a major warning to stay away from the company altogether…

Tom Gentile

About the Author

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Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.

With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.

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