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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Roger Hess who wrote (3470)	1/19/2000 10:01:00 AM
From: Dr. David Gleitman	Respond to of 6531

Buy on the speculation.... sell on the news.... David (Yeah, I agree, this stinks).

To: Roger Hess who wrote (3470)	1/19/2000 10:10:00 AM
From: Andrew Danielson	Read Replies (3) \| Respond to of 6531

Roger Hess, I have no intention of being a wet blanket, but I will explain to you why I sold my BRCM position this morning. Last night's earnings report shows a continuation of a pattern of decelerating earnings from BRCM. The Year-to-Year revenue growth over the last four quarters has gone like this: Q1: 172.5% Q2: 157% Q3: 146% Q4: 116% In addition to y-y growth, I look at sequential growth. Annualizing the sequential revenue growth over the last three quarters produces: Q2: 112% Q3: 100% Q4: 82% The company is still growing like gangbusters, but these are trends I don't like to see. In addition, BRCM's gross margin went down sequentially for the first time in awhile. Q1: 58.7% Q2: 59.5% Q3: 59.9% Q4: 59.1% Not a big drop, but BRCM's increasing gross margins was the factor I was using in my mind to offset their slowing growth. Now that margins seem to have stabilized, I can no longer use that argument. I think BRCM is a great company and will continue higher in the future, but when I plug in the slowing growth into my valuation metrics (derivatives of a gross profit variation on PEG), it no longer looks like a core holding for me. Later, Andrew Danielson