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Technology Stocks : Broadcom (BRCM)
BRCM 54.670.0%Feb 9 4:00 PM EST
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To: jim cannon who wrote (746)1/31/1999 10:58:00 AM
From: John Biddle   of 6531
 
I am just beginning to look at BRCM and would appreciate some
opinions from those more knowledgeable about this company. I agree
it has a great story, what with every high speed internet connection
type appearing about to explode and every one of them a strong BRCM
market.

However, the following numbers from the SI profile page and the
Broadcom web site give me pause.

3/31/98 6/30/98 9/30/98 12/31/98
Revenue 35.3 45.2 52.5 70.1
Net Inc. 7.7 7.7 8.2 12.8
Net Profit Margin 21.7 17.1 15.6 18.3
Shares Outstanding 41.3 47.9 48.4 50.1

These numbers look much worse from a per share perspective, which is
the more important way to look at it since shares are what you own.

3/31/98 6/30/98 9/30/98 12/31/98
Revenue/Share $0.85 $0.94 $1.08 $1.40
Net Inc./Share $0.19 $0.16 $0.17 $0.26

While I'll grant that the company's revenue is growing at a
tremendous rate, how long can they keep it up? Look at the trend of
shares outstanding. Your ownership in the company has been diluted
18.6% in 9 months. Will this slow down? Profit margin is back up
this quarter, a very good thing. However, with a revenue jump like
that I'd have expected a better improvement.

I'm not long or short this stock and my potential interest is to buy.
Please keep responses to relevant facts and/or reasoned opinion.

Thanks.
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