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Play Broadcom's Q3 Earnings Beat With These 5 Tech Funds
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Broadcom Inc. (AVGO - Free Report) posted favorable earnings results in its fiscal third quarter. Although the semiconductor company posted a marginal revenue miss, its wired infrastructure revenues that constitute 45% of total revenues were up 4% from the year-ago quarter. The upside in turn helped the company’s bottom line register year-over-year growth of 21.5%.
Broadcom’s encouraging earnings results had a positive impact on the tech sector and boosted investors’ sentiment. Following the promising development, investing in technology mutual funds with a significant holding in the San Jose-based company will be a prudent decision.
Q3 Earnings in Focus
Broadcomput up modest third-quarter fiscal 2018 numbers. Earnings of $4.98 per share beat the Zacks Consensus Estimate by 15 cents. The figure improved 21.5% from the year-ago quarter and 2% sequentially.
Non-GAAP revenues from continuing operations were $5.066 billion, up 13.4% from the year-ago quarter and 0.9% sequentially. GAAP revenues came in at $5.063 billion. The figure was almost in line with management’s guidance and the Zacks Consensus Estimate of $5.060 billion.
Additionally, wired infrastructure revenues totaled $2.3 billion, up 4% from the year-ago quarter, which in turn boosted the bottom line.For fourth-quarter fiscal 2018, Broadcom forecasts non-GAAP revenues of almost $5.4 billion (+/- $75 million). The Zacks Consensus Estimate is pegged at $5.39 billion.(Read More: Broadcom Q3 Earnings Top Estimates, Revenues In Line)
Broadcom’s Rally Boosts Tech Sector
Total earnings for the Tech sector in the second quarter are up 31.6% on 12.2% higher revenues, with 3.2% increase in margins. Moreover, third-quarter earnings growth is expected to be in the double-digits territory for 10 of the 16 Zacks sectors, with Technology being one such sector with strong growth.
Additionally, the tech sector has jumped 15.4% year to date (YTD), becoming the best-performing sector on the S&P 500. In fact, the tech sector’s performance is better than the S&P 500’s increase of 7.6%. Additionally, mutual funds related to this sector registered strong returns. According to Morningstar, technology mutual funds have returned 16% YTD.
Buy 5 Tech Mutual Funds
Here we have selected five technology mutual funds that have significant exposure to Broadcom. Moreover, these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds also have encouraging one-year annualized returns and minimum initial investment is within $5000. Also, each of these funds has a low expense ratio.
T. Rowe Price Science & Technology (PRSCX - Free Report) invests a huge portion of its assets in common stocks of companies that are likely to gain from any technological development. The fund invests both in domestic and foreign companies.
PRSCX carries an expense ratio of 0.80% compared with the category average of 1.37%. Moreover, PRSCX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 22.5%.
PRSCX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, PRSCX held 4.37% of its assets invested in Broadcom.
VALIC Company I Science & Technology (VCSTX - Free Report) seeks appreciation of capital for the long run. VCSTX invests a large chunk of its assets in common stocks of companies that will likely to gain from new technological or scientific development.
VCSTX carries an expense ratio of 0.99% compared with the category average of 1.37%. Moreover, VCSTX requires a minimal initial investment of $0. The fund has one-year annualized returns of 30.3%.
VCSTX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, VCSTX held 2.41% of its assets invested in Broadcom.
Columbia Global Technology Growth A (CTCAX - Free Report) invests a majority of its assets in common stocks, preferred stocks and securities that are convertible into common or preferred stocks. These equity securities are issued by technology companies that will benefit from technological advancements or improvement.
CTCAX carries an expense ratio of 1.31% compared with the category average of 1.37%. Moreover, CTCAX requires a minimal initial investment of $2,000. The fund has one-year annualized returns of 31.3%.
CTCAX has a Zacks Mutual Fund Rank #1. Further, as of the last filing, CTCAX held 1.90% of its assets invested in Broadcom.
Deutsche Science and Technology A (KTCAX - Free Report) invests a big portion of its assets in securities of companies of any size and involved in the science and technology sector. The fund may also invest in initial public offerings.
KTCAX carries an expense ratio of 0.96% compared with the category average of 1.37%. Moreover, KTCAX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 31.2%.
KTCAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, KTCAX held 2.68% of its assets invested in Broadcom.
Invesco Technology Investor (FTCHX - Free Report) seeks capital growth for the long run. FTCHX invests heavily in securities of companies from technology-oriented industries. The fund invests mainly in equity securities, including common stocks of technology companies.
FTCHX carries an expense ratio of 1.20% compared with the category average of 1.37%. Moreover, FTCHX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 24.7%.
FTCHX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, FTCHX held 1.39% of its assets invested in Broadcom.
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Play Broadcom's Q3 Earnings Beat With These 5 Tech Funds
Broadcom Inc. (AVGO - Free Report) posted favorable earnings results in its fiscal third quarter. Although the semiconductor company posted a marginal revenue miss, its wired infrastructure revenues that constitute 45% of total revenues were up 4% from the year-ago quarter. The upside in turn helped the company’s bottom line register year-over-year growth of 21.5%.
Broadcom’s encouraging earnings results had a positive impact on the tech sector and boosted investors’ sentiment. Following the promising development, investing in technology mutual funds with a significant holding in the San Jose-based company will be a prudent decision.
Q3 Earnings in Focus
Broadcomput up modest third-quarter fiscal 2018 numbers. Earnings of $4.98 per share beat the Zacks Consensus Estimate by 15 cents. The figure improved 21.5% from the year-ago quarter and 2% sequentially.
Non-GAAP revenues from continuing operations were $5.066 billion, up 13.4% from the year-ago quarter and 0.9% sequentially. GAAP revenues came in at $5.063 billion. The figure was almost in line with management’s guidance and the Zacks Consensus Estimate of $5.060 billion.
Additionally, wired infrastructure revenues totaled $2.3 billion, up 4% from the year-ago quarter, which in turn boosted the bottom line.For fourth-quarter fiscal 2018, Broadcom forecasts non-GAAP revenues of almost $5.4 billion (+/- $75 million). The Zacks Consensus Estimate is pegged at $5.39 billion.(Read More: Broadcom Q3 Earnings Top Estimates, Revenues In Line)
Broadcom’s Rally Boosts Tech Sector
Total earnings for the Tech sector in the second quarter are up 31.6% on 12.2% higher revenues, with 3.2% increase in margins. Moreover, third-quarter earnings growth is expected to be in the double-digits territory for 10 of the 16 Zacks sectors, with Technology being one such sector with strong growth.
Additionally, the tech sector has jumped 15.4% year to date (YTD), becoming the best-performing sector on the S&P 500. In fact, the tech sector’s performance is better than the S&P 500’s increase of 7.6%. Additionally, mutual funds related to this sector registered strong returns. According to Morningstar, technology mutual funds have returned 16% YTD.
Buy 5 Tech Mutual Funds
Here we have selected five technology mutual funds that have significant exposure to Broadcom. Moreover, these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds also have encouraging one-year annualized returns and minimum initial investment is within $5000. Also, each of these funds has a low expense ratio.
T. Rowe Price Science & Technology (PRSCX - Free Report) invests a huge portion of its assets in common stocks of companies that are likely to gain from any technological development. The fund invests both in domestic and foreign companies.
PRSCX carries an expense ratio of 0.80% compared with the category average of 1.37%. Moreover, PRSCX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 22.5%.
PRSCX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, PRSCX held 4.37% of its assets invested in Broadcom.
VALIC Company I Science & Technology (VCSTX - Free Report) seeks appreciation of capital for the long run. VCSTX invests a large chunk of its assets in common stocks of companies that will likely to gain from new technological or scientific development.
VCSTX carries an expense ratio of 0.99% compared with the category average of 1.37%. Moreover, VCSTX requires a minimal initial investment of $0. The fund has one-year annualized returns of 30.3%.
VCSTX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, VCSTX held 2.41% of its assets invested in Broadcom.
Columbia Global Technology Growth A (CTCAX - Free Report) invests a majority of its assets in common stocks, preferred stocks and securities that are convertible into common or preferred stocks. These equity securities are issued by technology companies that will benefit from technological advancements or improvement.
CTCAX carries an expense ratio of 1.31% compared with the category average of 1.37%. Moreover, CTCAX requires a minimal initial investment of $2,000. The fund has one-year annualized returns of 31.3%.
CTCAX has a Zacks Mutual Fund Rank #1. Further, as of the last filing, CTCAX held 1.90% of its assets invested in Broadcom.
Deutsche Science and Technology A (KTCAX - Free Report) invests a big portion of its assets in securities of companies of any size and involved in the science and technology sector. The fund may also invest in initial public offerings.
KTCAX carries an expense ratio of 0.96% compared with the category average of 1.37%. Moreover, KTCAX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 31.2%.
KTCAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, KTCAX held 2.68% of its assets invested in Broadcom.
Invesco Technology Investor (FTCHX - Free Report) seeks capital growth for the long run. FTCHX invests heavily in securities of companies from technology-oriented industries. The fund invests mainly in equity securities, including common stocks of technology companies.
FTCHX carries an expense ratio of 1.20% compared with the category average of 1.37%. Moreover, FTCHX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 24.7%.
FTCHX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, FTCHX held 1.39% of its assets invested in Broadcom.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>