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Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions
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On Oct 15, we issued an updated research report on Broadcom Inc (AVGO - Free Report) .
The now San Jose, CA-based company is a premier designer, developer and global supplier of a broad range of semiconductor devices. The company’s strength in analog III-V based products, and complex digital and mixed signal complementary metal oxide semiconductor (“CMOS”) based devices is notable.
Notably, Broadcom has beaten the Zacks Consensus Estimate in the trailing four quarters, delivering an average positive surprise of 2.3%.
Notably, shares of Broadcom have returned 12.4% in the past three months, outperforming the industry’s rally of 10%.
Portfolio Strength: A Key Catalyst
Broadcom boasts of a broad-based portfolio, comprising set-top box system-on-chips (SoCs), Ethernet products, embedded processors and controllers, RF front end modules, filters, power amplifiers, enterprise storage solutions, and light emitting diodes, among other semiconductor based solutions.
The company is poised to well to capitalize on the lucrative Internet of Things (IoT) market on the back of these aforementioned solutions.
Further, Broadcom’s strong relationships with leading OEMs across multiple target markets have helped it to gain key insights into the requirements of customers. This insight has helped the company to be more efficient and productive in better-serving the target markets and customers.
Based on its expanding product portfolio, the company is well-positioned to address the needs of rapidly growing technologies like 5G.
Buyouts Aid Broadcom to Diversify End Markets
Broadcom pursues an aggressive acquisition strategy, which in turn fortifies the company’s business model by diversifying end markets.
For instance, the acquisition of LSI Corporation helped the company to diversify its existing business line from wired infrastructure, wireless and industrial businesses into the storage chip market.The addition of Brocade enables the company to further penetrate the FC SAN market.
Broadcom recently entered into a definitive agreement to acquire CA, Inc (CA - Free Report) for $18.9 billion in cash. The increasing demand of IT management software solutions compelled Broadcom to pick CA.
CA’s substantial customer base will enable Broadcom to explore the infrastructure software market and expand its TAM. The company attempts to expand mission critical technology solutions portfolio on the heels of CA’s mainframe and enterprise software businesses.
Diversification of end market and customer base bodes well for the company. This is anticipated to add resilience to Broadcom’s current business model.
Redomiciliation to San Jose: A Smart Move
Broadcom’s move of shifting headquarters to San Jose, CA from Singapore, will aid it to pursue the acquisition of Islandia, NY-based CA. The base-shift is anticipated to make the regulatory environment less complicated for Broadcom.
In fact, on Oct 12, Broadcom in an SEC filing announced that it has achieved clearance under European Union’s (“EU”) antitrust laws pertaining to its impending acquisition of CA. Notably, EU’s nod was the last hurdle for the company. The company now expects the buyout to conclude on Nov 5, 2018.
Long-term earnings growth for Twitter and CyberArk is projected to be 22.1% and 19.8%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Broadcom (AVGO) Rides on Portfolio Strength & Acquisitions
On Oct 15, we issued an updated research report on Broadcom Inc (AVGO - Free Report) .
The now San Jose, CA-based company is a premier designer, developer and global supplier of a broad range of semiconductor devices. The company’s strength in analog III-V based products, and complex digital and mixed signal complementary metal oxide semiconductor (“CMOS”) based devices is notable.
Notably, Broadcom has beaten the Zacks Consensus Estimate in the trailing four quarters, delivering an average positive surprise of 2.3%.
Notably, shares of Broadcom have returned 12.4% in the past three months, outperforming the industry’s rally of 10%.
Portfolio Strength: A Key Catalyst
Broadcom boasts of a broad-based portfolio, comprising set-top box system-on-chips (SoCs), Ethernet products, embedded processors and controllers, RF front end modules, filters, power amplifiers, enterprise storage solutions, and light emitting diodes, among other semiconductor based solutions.
The company is poised to well to capitalize on the lucrative Internet of Things (IoT) market on the back of these aforementioned solutions.
Further, Broadcom’s strong relationships with leading OEMs across multiple target markets have helped it to gain key insights into the requirements of customers. This insight has helped the company to be more efficient and productive in better-serving the target markets and customers.
Based on its expanding product portfolio, the company is well-positioned to address the needs of rapidly growing technologies like 5G.
Buyouts Aid Broadcom to Diversify End Markets
Broadcom pursues an aggressive acquisition strategy, which in turn fortifies the company’s business model by diversifying end markets.
For instance, the acquisition of LSI Corporation helped the company to diversify its existing business line from wired infrastructure, wireless and industrial businesses into the storage chip market.The addition of Brocade enables the company to further penetrate the FC SAN market.
Broadcom recently entered into a definitive agreement to acquire CA, Inc (CA - Free Report) for $18.9 billion in cash. The increasing demand of IT management software solutions compelled Broadcom to pick CA.
CA’s substantial customer base will enable Broadcom to explore the infrastructure software market and expand its TAM. The company attempts to expand mission critical technology solutions portfolio on the heels of CA’s mainframe and enterprise software businesses.
Diversification of end market and customer base bodes well for the company. This is anticipated to add resilience to Broadcom’s current business model.
Redomiciliation to San Jose: A Smart Move
Broadcom’s move of shifting headquarters to San Jose, CA from Singapore, will aid it to pursue the acquisition of Islandia, NY-based CA. The base-shift is anticipated to make the regulatory environment less complicated for Broadcom.
In fact, on Oct 12, Broadcom in an SEC filing announced that it has achieved clearance under European Union’s (“EU”) antitrust laws pertaining to its impending acquisition of CA. Notably, EU’s nod was the last hurdle for the company. The company now expects the buyout to conclude on Nov 5, 2018.
Zacks Rank & Other Stocks to Consider
Broadcom currently carries Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader sector are Twitter and CyberArk Software Ltd. (CYBR - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Twitter and CyberArk is projected to be 22.1% and 19.8%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>