Chipmaker Falls Out of Favor

Broadcom Corporation is a global semiconductor solution for wired and wireless communications. Broadcom products deliver voice, video, data and multimedia connectivity in the home, office and mobile environment. The Company’s segment includes Broadband Communications, Mobile and Wireless and Infrastructure and Networking.

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• Broadcom’s low valuation reflects the flat earnings growth of the last 2 years. The current valuation is consistent with levels seen in the bottom of the credit crisis (Oct 2008).

• We believe the downside risk is limited due to its strong balance sheet and very low valuation.

  Purple Chips 12 -18 month target: $36.00

• LOW VALUATION IN BROADCOM UNDER $26.50 (BRCM-US, $USD 26.06) FULL POSITION (5.0%)

PURPLE CHIPS TARGET: $36.00 POSITION SIZE: FULL (5.0%) P/E: 9.0X DIV: $.44 or 1.69% MKT CAP: $13B Debt: NIL RETURN ON CAPITAL: 54.1% EARNINGS YIELD: 8.8% 5 YR EPS Growth rate:15% P/E/G Ratio: 0.6X EPS: 2.90 2014 EST.: $2.73 2015 EST.: $3.07