Raymond, You seem to have a good handle on certain statistics and data sources. I took the data available for BRCM from WSJ online in Briefing Books and did the following back-of-the-workbook analysis:
________________3/31/98_____6/30/98_____9/30/98_____12/31/98
Rev (millions)_______35.3_______45.2________52.5________70.1
Net Income_________7.7________7.7_________8.2________12.8
Net Margins_______21.8%______17.0%______15.6%_______18.3%
Sales growth_______N/A_______21.9%______13.9%_______25.1%
NI growth_________N/A________0.0%_______6.1%_______35.9%
I think using a straight comparison on margins, such as your numbers show at 18%, can be misleading. Your analysis doesn't capture the rate of growth. The above basically shows that BRCM's net income growth, on a quarterly basis, is now 35.9%. Jumping by a factor of 6 times Septembers growth. Now, arguably, which I am sure someone will point out, these are still relatively small numbers for net income, hence, the high percentage gains. But I argue, hey look, it is better than losing money at an accelerated rate; does Amazon come to mind?
Just thought a little more dynamic way of looking at BRCM's financials was in order. Not to say the stock isn't valued at a premium, just to say that the premium looks to be justified based on the last three quarters.
Regards, Keith
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