Author's Note: Analysts give high marks but is this the right time for new investors?
The Chart of the Day belongs to the highly popular semiconductor company Broadcom (AVGO). I found the stock by using Barchart's powerful screening functions to find stocks with the highest technical buy signals, highest Weighted Alpha, superior current momentum and having a Trend Seeker buy signal then used the Flipchart feature to review the charts for consistent price appreciation. Since the Trend Seeker signaled a buy on 5/15 the stock gained 20.81%.
Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.
Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 20 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report.
Barchart Technical Indicators:
- 100% technical buy signals
- 110.67+ Weighted Alpha
- 95.79% gain in the last year
- Trend Seeker buy signal
- Above its 20, 50 and 100 day moving averages
- 7 new highs and up 25.72% in the last month
- Relative Strength Index 82.03%
- Technical support level at $1,695.68
- Recently traded at $1,735.04 with 50 day moving average of $1,358.75
Fundamental Factors:
- Market Cap $807 billion
- Revenue expected to grow 42.60% this year and increase another 15.20% next year
- Earnings estimated to increase 12.00% this year, an additional 24.50% next year and continue to compound at an annual rate of 17.70% for the next 5 years
Analysts and Investor Sentiment -- I don't buy stocks because everyone else is buying but I do realize that if major firms and investors are dumping a stock it's hard to make money swimming against the tide:
- Wall Street analysts issued 25 strong buy, 9 buy and 6 hold recommendations
- Analysts have price targets between $1,110 and $2,100 with a consensus at $1,798
- Value Line rates the stock its average rating of 3 but advises to hold if you have it but new investors should enter on a pull back
- CFRAs MarketScope has a 4 star buy rating and a 12 month price target at $1,850
- MorningStar gives the stock an average 3 star rating with a Fair Value of $1,550 but says it is within their Fair Value parameters
- 170,320 investors monitor the stock on Seeking Alpha
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.
On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
