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Broadcom Corp. Message Board

  • lakers_w lakers_w Nov 3, 2013 1:28 PM Flag

    Jefferies identifies top tech stock Buy Out Candidates

    Private equity firms have utilized the incredible market strength over the past couple of years to have initial public offerings on some of the deals that were put together before, and even during, the market meltdown that started in 2007. That fall, the S&P 500 peaked at 1,565 on October 9 and started a plunge that would trade to 666 intraday by March of 2009. The ability to cash out some of the large deals has provided many of the funds with the kind of liquidity required to make new leveraged buyouts (LBOs).

    The fact that the top private equity firms are flush with cash is not lost on the analysts at Jefferies. They are on the hunt for potential LBO targets. In addition to raising cash by taking their old deals public, the strong market has helped strengthen inflows from institutional and high net worth investors looking to put money to work. Looking for stocks with high cash flow, low debt and solid business models has some interesting names showing up on the Jefferies screens. We highlight some of the large cap candidates.

    Broadcom Corp. (NASDAQ: BRCM) earnings matched expectations, although some Wall Street firms were disappointed. Shares have declined close to 25% in the past six months as its guidance has failed to inspire confidence among investors on the past two earnings occasions. This seems surprising for a company that is deeply embedded into the mobile computing revolution and supplies chips to almost half of the world’s smartphones and tablets. The falling price and strong business model make it a solid target. The consensus price target for the stock is $31. Broadcom closed Tuesday at $27.66. Investors are paid a 1.7% dividend.

40.69+0.36(+0.89%)Oct 30 4:00 PMEDT

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