Broadcom: VMWare Is Driving An Upgrade In Business Quality (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Growth is healthy, both organically and inorganically. Upselling and an improved go-to-market strategy are leading to higher organic growth with great near-term revenue visibility.
• A revenue mix shift toward the software business makes a compelling case for margin expansion and a transition to a negative working capital profile.
• AVGO is valued at a small discount vs peers. Given growth and margin catalysts, I believe there is a case for margin expansion and a premium multiple.
• Relative technicals vs the S&P 500 point bullish, indicating a resumption of the alpha-generating trend.
• Apple and customer concentration is a key risk monitorable, although the acquisition of VMWare is likely to reduce the extent of this risk.

Read the full article here.