Semiconductors remain a hot space, helped in no small part by strong enterprise networking demand, improving wireless demand, prospects for an auto/industrial recovery in 2021, and increasing confidence on both the likelihood of vaccines knocking back the COVID-19 pandemic and the new U.S. administration making peace with the Chinese.
I continue to believe that Broadcom’s (AVGO) common shares offer some compelling value for money at today’s level, but I believe investors with more interest in income may want to consider the Broadcom preferreds (AVGOP) – a mandatory convertible preferred stock that gives investors participation in upside to the common shares as well as a decent (if not good) yield in the meantime. Broadcom shares have remained a frustrating laggard relative to the broader semiconductor space, but relative to both the growth and margin potential, I believe the market’s skepticism is misplaced.
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Broadcom's Preferreds Are Worth A Look As The Common Shares Continue To Lag
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