This technology company’s shares were just initiated at Macquarie with an ‘Outperform’ rating. The company walloped analysts’ earnings estimates by $0.15 last quarter, and is on tap to grow at double-digit rates for the next five years.
Broadcom Ltd. (AVGO)
From Blue Chip Growth
On Wednesday, Broadcom Ltd. (AVGO) announced that it is selling its data center switching, routing and analytics business to Extreme Networks for $55 million in cash. Broadcom had previously acquired this business through its $5.9 billion acquisition of Brocade Communications Systems, which was completed in November.
This is a good deal for Broadcom because it’s divesting the remaining parts of the Brocade business that it doesn’t want. Instead, Broadcom plans to build up Brocade’s fiber channel storage area network (FC SAN) business. The FC SAN business is expected to generate double-digit percentage returns on investments for Broadcom.
This builds upon Broadcom’s already strong outlook; analysts expect Broadcom to post double-digit sales and earnings growth over the next several quarters. In the meantime, I recommend that you continue adding AVGO shares up to $237.
Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, March 31, 2017