Welcome to an unofficial guide to BRCM otherwise known better as Broadcom.
This site is under a major redevelopment where we will have technical as well as fundamental analysis gathered from across the financial world. It will be a central repository for charts and financials. As we proceed we will review stock performance, investor expectations, as well as management moves the company is making in order to meet those demands in order to increase that all important P/E ration.
As we all know the P/E ratio is not always in correlation with profit nor what we normal investors deem wise. But still the site will cover the investor expectations and the company moves to meet these.
Product reviews and market penetration will also be the subject for review as we thoroughly analyze and bring you all the information you will ever need on Broadcom (BRCM).
Let's begin with a company review and cursory analysis of the 2009 annual report and performance.
An overview of the business model is that they are a major worldwide player in computer chips for all types of computer communications. Communications would include everything from data through actual voice content. They also provide the infrastructure from varied delivery on communications content in home,
business, and mobile devices. They are an integrated company that handles all aspects of this communication from the servers through the blue tooth headsets. Their primary business model covers broadband
communications for personal use in the home, communications delivery and facilitation in what they call the “hand” aka mobile, and enterprise networking solutions that would encompass most business applications.
Their home target market includes a large portfolio of offerings. All revolving around making the delivery of communications in the home with maximum impact and at the same time providing the homeowner with stable delivery channels. These cover the range from digital video recorders through wireless local area network devices and cabling. More or less all the hardware you need in your home for communications as well as multimedia entertainment.
Their mobile target market segment delivers seamless integration between business and personal use. They provide the chips to allow the mobile devices to process the vast amount of data needed to meet the market demands for communications delivery. These processors are inside of smart phones, pda's, and global positioning systems. We oftentimes take for granted the delivery of this content to our lives. It is Broadcom (BRCM) that makes the massive amount of computer processing power within these devices possible.
Their third target market is straight form business communications applications. This is oftentimes referred to as Enterprise Networking. This is a powerful and focused thrust of the business. The processing power that their chips bring to the business infrastructure cannot be overstated. This company has a backbone of reliable delivery to all sized businesses as well as metropolitan centers and municipal infrastructures. They provide the switching technology that allows billions of data bits to be routed
properly and millions of call to be handled flawlessly. The technology being delivered is phenomenal and impressive under and scrutiny.
The Industry as it relates to the core target markets.
The growth, importance and dominance of communications in our lives is nothing less than beyond description. There is not a point in our lives that is not greatly affected by some communications. Just thirty years ago this was not the case. Communications were restricted to the wired phone, one way receipt of information through television and newspapers. This could hardly even be described as a culture of communications. But today that is exactly how we could describe out culture. Everything revolves around
some sort of communicators.
The percentage of the population that has a cellular phone, Internet at home, and at least one type of social network is increasing every day. Interactive communication, news delivery and research is commonplace. The communication through minute by minute emails is a great departure from our previous reliance on hand delivered mail. It was just 25 years ago that we say any prevalence of something as simple as a fax machine and even overnight delivery of data.
Now we have a communications and information intense society. This growth has in no small part been fueled and demand has been met by the technology and processing power from Broadcom BRCM. The public now has interactive boxes on their televisions that can provide multimedia content streamed direct from a source “on demand”. Computers can communicate billions of bits of code between one another without the user blinking an eye. Gaming consoles allow users to interact across the world and even compete across
the globe without leaving their living rooms.
Businesses can coordinate manufacturing delivery and orders with real time data flow direct from automated inventory systems that are triggered from retailers was the customer checks out in line. Everything is data intensive. This is what this company does. They meet and exceed the consumer and business demands fro communications processing technology.
A little review of the stock BRCM and the financials.
The maturity of the company was finally shown when the board of directors approved a dividend. While it is believed that this can be looked at as a growth stock it is oftentimes looked at as a stock that will grow as the market grows but not necessarily grow in penetration to that market. Of course things can change quickly but on the current road a dividend declaration was certainly an indication of the stocks maturing into a new stage of its l
On cursory review of the financials it would appear that the company has had a steady increase of revenues for the past 5 years. From $2.6 billion in 2005 to $4.4 billion in 2009. This of course includes the $170 million from the Qualcom arrangement. It is regrettable to note that with the revenue growth the company was not able to maintains margins and has a dangerously low net profit. The wisdom of 2009 being the first year the company gave away $50 million as charitable contributions when they had a net
income for only $65 million is something that will require us to look into further on a later date. Of course this quick financial look that is a number that strongly stands out. The in-process research and development number at $0.00 for 2009 is also a cause for concern in a company that serves such a rapidly changing market as communications. As soon as our team updates themselves further on the company we will of course clarify these points. We will explain the explainable and question what is not explainable.
Hopefully you enjoyed this brief overview of the company. As stated before this site is under massive overhaul in order to allow us to upgrade our systems to deliver BRCM stock charts as well as more complete and thorough technical and financial analysis of the stock.
For now simply bookmark us and return on a later date as we update, improve, and further develop our delivery of what we are trying to communicate.
