Avago Technologies (AVGO)
From Cabot Wealth Advisory 12/30/14 Sign up for Cabot Wealth Advisory—it’s free!
One stock featured in Cabot Top Ten Trader that mixes both defensive and growth characteristics is Avago Technologies (AVGO) a chipmaker that has historically done great business in smartphones, and that hit a homerun with its acquisition of LSI’s storage business earlier this year.
The purchase diversified the business, gave it exposure to another huge and profitable growth area, and resulted in tons of synergies that are driving earnings through the roof. Indeed, analysts see the 2015 fiscal year (ending in October) bringing nearly $7.50 in earnings per share, and that’s likely conservative given that Avago has crushed estimates since the LSI deal was finalized.
The big catalyst, modest dividend (1.4% annual yield), reasonable valuation (14 times next year’s estimate) and history of top-notch execution are giving big investors reason to accumulate. AVGO isn’t in the first inning of its advance, but it’s set up a nice, tight sideways shelf following its huge earnings report in early December. I think you can nibble here or on dips, with a stop in the low 90s.
For more updates on Avago Technologies and to find out about additional momentum stocks featured in this week’s issue, consider taking a risk-free subscription to Cabot Top Ten Trader. This year, we grabbed many double and triple-digit winners, including 303% gains in VipShop Holdings, 126% gains in Canadian Solar, 133% gains in Netflix, and we see many more strong stocks that have the possibility to be next year’s winners.
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|Avago Technologies (AVGO)
1 Yishun Avenue 7
65 6755 7888
|Index Membership: N/A
Industry: Semiconductor - Broad Line
Full Time Employees: 8,400