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Sell Broadcom For a 19% Win

Posted by on April 16, 2017 12:28 PM
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Categories: Stocks

April 16, 2017: Sell Broadcom for a 19% win in 84 days and congrats if you made money on the trade.

March 01, 2017: Broadcom Ltd reports Q1 EPS of $3.63 versus the $3.48 estimate. Revenue also beat coming in at $4.14 billion versus the $4.06 billion estimate.

CEO Hock Tan said, “We had a very good start to our fiscal year 2017 delivering first quarter revenue and gross margin at the top end of guidance. We expect healthy demand for our products to continue and we are guiding second fiscal quarter revenue to grow organically by 15% on a year over year basis.”

February 17, 2017: JPMorgan Chase and Co reiterates Broadcom with an Overweight rating and a price target of $230. Based on JPMorgan’s research efforts and triangulating recent industry news, they believe that Broadcom, working with Apple, has developed a chip solution that will be used to power the wireless charging functionality on the iPhone platform. Although it is unclear whether Apple will add the wireless charging capability on the iPhone 8 (they believe Apple will likely be prudently cautious around new battery/power related features given what happened with the Samsung Note 7), firm is confident that when Apple decides to embed the capability in the iPhone, it will be a Broadcom based solution.

December 12, 2016: Not only did Broadcom Limited get a positive mention today on CNBC’s Mad Money but analysts have been piling into the stock and giving it buy ratings over the last few weeks.

The stock of Broadcom Limited has just done a horizontal breakout.

December 9, 2016: Canaccord Genuity reiterates a Buy rating on Broadcom Limited, and sets a price target of $250. Canaccord Genuity says that Broadcom Limited reported strong Q4/F16 results and issued Q1/F17 revenue guidance above expectations driven by strong margins and an anticipated 20% sequential sales ramp in its storage business. Canaccord says that management continues to execute on synergy targets and increased its long-term operating margin target to 45% from 40%.

December 9, 2016: Price target for Broadcom Limited raised to $190 from $180 at Nomura. Nomura reiterates its Buy rating for Broadcom Limited.

December 9, 2016: Price target for Broadcom Limited raised to $200 from $190 at RBC. RBC reiterates its Top Pick rating for Broadcom Limited.

December 9, 2016: Price target for Broadcom Limited raised to $230 from $220 at JPMorgan. JPMorgan reiterates its Overweight rating of Broadcom Limited.

December 8, 2016: Broadcom Limited reports Q4 2016 EPS of $3.47 versus the $3.37 estimate. Revenue also beat coming in at $4.14 billion versus the $4.12 billion estimate. The company doubles its dividend to $1.02 from $0.51 (indicated yield 2.39%). The dividend and the distribution are both payable on December 30, 2016, to shareholders or unitholders of record, as applicable, at the close of business (5:00 p.m.) Eastern Time on December 16, 2016.

The CEO said, “Fiscal 2016 was clearly transformative for our company with the acquisition of Broadcom Corporation. We finished the year on a very strong note, delivering a record level of revenue with 9 percent sequential revenue growth in the fourth quarter. Reflecting the operating leverage from our larger scale and improved profitability, we announced today a doubling of our dividend.”

December 5, 2016: Loop Capital initiates coverage of Broadcom Limited with a Buy rating and a price target of $206.

November 29, 2016: RBC reiterates Broadcom Limited as its Top Pick rating, and sets a price target of $190. RBC thinks Broadcom Limited will report sizable upside to EPS as they see a capital allocation update as a point of focus on the Oct-qtr earnings call; RBC thinks 50 – 100% dividend increase in likely.

November 14, 2016: Lone Pine Capital discloses a new stake in Broadcom Limited via its latest quarterly holdings 13 F-HR filing.

Broadcom Limited Stock Chart

The Finviz screener settings used to find Broadcom Limited are: Sector Technology, Forward P/E Low (<15), EPS growth this year 300% – 400%, Sales growth past 5 years High (>25%), Sales growth qtr over qtr 100% – 200%

Broadcom Limited is a diversified global semiconductor leader built on 50 years of innovation, collaboration, and engineering excellence. With roots based in the rich technical heritage of technology powerhouses AT&T/Bell Labs, Lucent, and Hewlett-Packard/Agilent, Broadcom focuses on technologies that connect our world. With the addition of industry leaders LSI, Avago Technologies and Broadcom Corporation, the company has the size, scope, and engineering talent to continue leading the sector into the future.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on unless specifically stated in the article. Owner of Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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