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

To: Francis Gaskins who wrote (101)	4/17/1998 4:35:00 PM
From: Mark T. Heath	Read Replies (1) \| Respond to of 6531

Well, I owe my Dean Witter guy a big dinner now. I got offered shares of this IPO last week and I said ok on his recommendation only. I still don't know anything about the company. I'll start doing some research and I've read all of the postings on this thread as part of it. Not a bad first day huh? Looks alot like Netscape's first day. Let's hope this is thing it has in common with Netscape.

To: Francis Gaskins who wrote (101)	4/17/1998 11:23:00 PM
From: Andrew Gregory	Read Replies (1) \| Respond to of 6531

"Broadcom Lives Up to the Hype" Francis, first of all I would like to say I enjoy your work. But, I do have a couple of questions regarding this article. You state five semiconductor companies sell for more than 10x the previous annualized quarters sales. I believe these are Linear 11.4x Maxim 10.6x PMCS 11.9x RMBS 27.2x VTSS 13.4x Many other companies have far lower multiples, but among similar companies or specialized chip companies some multiples are LEVL 5.6x ALTR 6.5x XLNX 5.6x AMCC 5.6x BRCM is currently at 32x You state that BRCM could easily trade at 15x the annualized 1998 Q3 run rate of $150 million or $2.25 billion. So what are saying? At the end of this year will BRCM be right where it is today because the $150 million run rate won't be the previous quarters rate until at least October. BRCM already has a market cap of $2.3 billion and 15x is roughly a 10% premium over the next highest semiconductor stock ( I'm not counting RMBS because I believe it is not an apples to apples comparison because they are operating under a different business model ). As far as the projected earning go between 1998 and 1999 revenues are projected to growth 61% from $150 to $241 million. EPS is projected to increase only 31% from $0.54 to $0.71. Nice solid earning, no doubt, but not spectacular. Why are earnings only growing half as fast as sales are margins expected to be under that much pressure? Is dilution also being taken into account? I realize this is a big time story stock, and by all appearance a great company but do believe that BRCM offers a fair risk / reward at these levels compared to alternatives such as LEVL and AMCC?