This semiconductor company’s shares were just raised to a “Strong Buy” at Zacks, due to strong fundamentals after its recent acquisition of LSI.
Avago Technologies Limited (AVGO)
from Blue Chip Growth
Avago Technologies Limited (AVGO) is another semiconductor company that’s hitting my quantitative screens. Based in Singapore, Avago Technologies develops and supplies analog semiconductor devices for over 40,000 customers in wireless communications, wired infrastructure and industrial markets.
While AVGO went public just five years ago, it has a long history. For three decades it was a part of Hewlett-Packard, and then it was spun off with the whole HP semiconductor business as part of Agilent Technologies. During this time, Avago assembled a team of over 1,000 design and product engineers and developed an extensive portfolio of intellectual property plans. Today, Avago operates design centers in Asia, Europe and the U.S and manufacturing facilities primarily in Asia. About 85% of its sales come from outside the U.S. and the company is a clear beneficiary of global growth.
Recently the company completed its takeover of LSI Corp and took its place on the S&P 500. Being a member of the most important U.S. benchmark index exposes the shares to ETF and index fund buying, as well as interest from active managers who focus only on the S&P 500. The company will provide second-quarter earnings results, as well as an outlook for the newly combined company, on Thursday, May 29. And it’s shaping up to be a strong report. Currently, analysts are calling for $0.76 EPS on $679.64 million in revenue. Compared with the year ago quarter this works out to 24.6% earnings growth and 20.9% sales growth. I recommend you add shares of this Moderately Aggressive stock under $73.
Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, June 2014