For Now, 'Okay' Will Have To Be Good Enough For Broadcom

Relative to what other companies in important end-markets like networking had already said about the June quarter (and guided for in the September quarter), Broadcom’s (AVGO) fiscal third-quarter results weren’t bad. Then again, while I have spent most of this year expecting a weaker/slower recovery in the chip sector, that wasn’t the consensus outlook, so there was still some room for Broadcom to disappoint expectations of a quick, robust turnaround.

I believe Broadcom’s core semiconductor business remains strong, and while the acquisition of Symantec’s (SYMC) enterprise security business is not without execution risks, it makes sense in the broader context of Broadcom management’s pursuit of financial engineering leverage. Broadcom's shares do still look undervalued to me, though not to a degree that would lead me to call this a “must consider” name in the space.

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For Now, 'Okay' Will Have To Be Good Enough For Broadcom