Today’s stock suggestion is Broadcom (BRCM). It’s a semi-conductor stock.
Listen, it’s been really hot. And while it’s one of the oldest names, it’s also one of the biggest winners out there right now. And I still think there is a lot more room to come.
Think about this: Broadcom’s products, they’re the backbone of communication broadband infrastructure, from set top boxes, to last model technology. By the way, that’s why 99.9% of all data traffic is going to cross a Broadcom chip.
The company has sold close to 6 billion transistors. They have the world’s best data center switches, the best gateway products. Of course they’re mobile and of course it’s all about connectivity, multimedia, radio frequency power and cellular modem.
The future business drivers include the Internet-of-things home (that’s going to be huge for them), data centers , wireless, and the automotive is just going to be one big computer chip on a speaker and wheels. Service providers, multicore processors. Execution, by the way, has been very impressive. Management always post pretty good results. In fact, they usually beat the consensus with ease.
As a result, Wall Street has been hiking their future consensus. Right now for fiscal year 2015, it’s at $3.22. A couple of months ago, it was $2.70.
So for me, I think the next leg up in the stock takes it up to $44. Longer term, you might recall that this was a $166 stock. Now it’s too early to make that kind of a crazy, crazy call -- but I think that there is a lot more upside to this.
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