AVGO

Broadcom Ltd.

TMT


Presented:11/08/2017
Price:$272.40
Cap:$121.22B
Current Price:$175.98
Cap:$821.93B

Presented

Date11/08/2017
Price$272.40
Market Cap$121.22B
Ent Value$122.43B
P/E Ratio212.51x
Book Value$48.59
Div Yield1.5%
Shares O/S445.00M
Ave Daily Vol2,941,290
Short Int0.90%

Current

Price$175.98
Market Cap$821.93B
Broadcom Ltd. engages in the design, development and supply of analog and digital semiconductor connectivity solutions. It serves four primary end markets: wired infrastructure, wireless communications, enterprise storage and industrial & other. The company product's includes data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays. The company was founded in 1961 and is headquartered in Singapore.

Publicly traded companies mentioned herein: Apple Inc (APPL), Broadcom Ltd. (AVGO), NXP Semiconductors NV (NXPI), QUALCOMM Inc (QCOM), Samsung Electronics Co Ltd (005930 KS)

Highlights

The presenter is long shares of Broadcom (AVGO) at $270, and views the setup as a potential win/ win for investors, regardless of whether the $100+ billion bid to acquire QUALCOMM (QCOM) is successful. AVGO’s CEO, Hock Tan, is well-liked and based on his public statements seems optimistic about the deal’s prospects. With synergy estimates in the $3.5-4bn range, pro forma earnings could amount to $25/ share or more. With the stock trading at ~11x, the risk/ reward is favorable and he would expect upside to at least $350 (14x) over the next 12-24 months. In a non-deal scenario, Broadcom could generate $19-20 of EPS in 2019; at just ~14x this estimate today, the presenter sees minimal downside risk and upside to $320 (16x) for AVGO stock.

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Idea Discussion

Commentor 1 - 2 weeks ago

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