I've been pretty bullish on both Avago and Broadcom (NASDAQ:AVGO)
over the years and now that the merger is completed, nothing about this
combination has really changed my mind. If anything, watching Avago's
management more closely has led me to a greater appreciation of how they
see the semiconductor world differently than most and how that informs
their management choices. At an overly simplified level, this isn't a
company that believes that success will come from pursuing growth for
its own sake, but rather that strong margins generated by businesses
with meaningful competitive advantages is the real key.
I continue to believe that fair value for the new Broadcom is in the
neighborhood of $170, but that there could be some upside to the
long-term underlying growth rate of around 5%. As a diversified chip
company with tremendous scale and 40%-plus market share in multiple
markets, I think Broadcom can still be thought of as a core tech
holding, but it may be better to try to add shares when the enthusiasm
cools a bit.
Continue here:
Excellence Rewarded With Avago
No comments:
Post a Comment