To: stockman_scott who wrote (46038 ) 1/9/2002 12:42:53 PM From: Sully- Respond to Broadcom (BRCM) 52.02 +2.78: You name the communication market segment and this bellwether comm IC company is in it. It's not surprising it was the quickest chip company ever to hit $1 bln in sales. Key segments include local area networking (LAN), cable modems, set top boxes and servers among others. The stock is moving higher today thanks to positive comments at a Morgan Stanley conference. The company expects to return to profitability and its historical 50% growth rates later this year. It stressed that its technology, customer and supplier relationships, and management expertise will allow it succeed long-term....Some analysts are expecting the company to exceed estimates when it reports Jan 22 despite some softness in the cable set-top business. Strength in its server, cable modems, and enterprise networking business should more than offset its cable set-top box business. BRCM is seen as a core holding for investors playing the anticipated recovery of the comm IC sector later this year. Its diversified product portfolio and leadership in its end markets make it an attractive holding in the comm IC world. However, Briefing.com believes the stock is expensive here with a market cap approaching $14 bln for a company expected to post sales of $1.1 bln this year. Also, the stock is near the high end of its 10-month trading range. You could argue that its still one of the cheapest comm IC stocks on a price/sales basis. However, we think they are expensive also. Bottom line: The inventory hang in many of its segments has dissipated substantially (enterprise networks) or disappeared altogether (cable modems). The CEO was very bullish at the conference, but the valuation appears stretched here . -- Robert J. Reid, Briefing.com
