Broadcom

As we near the end of the month, we are entering our next sector of analysis, communications. This includes companies that provide wired and wireless services, such as the major cellular carriers; that play a major role with Internet-based broadcasting, such as Facebook; also included are producers and holders of servers and equipment manufacturers. The company we are looking at today is Broadcom Corp (BRCM).

This company falls under the "wired and wireless connectivity" label in our charts (most of the companies over the next weeks will be categorized as such) but it specializes in IP (Internet Protocol) Processors, Bluetooth technology, broadband, cable, and cellular connections (2G, 3G, 4G, and the like). Established in 1991, and currently headed by CEO Scott McGregor, Broadcom sells stocks for about $30 and proved itself as one of the more static companies; even though we made some money in our simulated investments, no significant margin for profit yet exists. First, we need to turn back the clock to the late 90's, when Broadcom went public and started trading. Like most other companies of the time, and a significant aspect of the transition, BRCM experienced the surge of the Information Era but soon fell back to 1998 levels in 2001. There was a slight spike in early 2006 due to new Fiscal Year hopes, and the same was seen in early 2011. On more recent terms, this quarter is not looking good - stocks have fallen about $2 over the past month (remember we said shares were quite stagnant). The last week of October, to explain the sudden drop, Broadcom suggested investors to buy before the earnings releases, but the earnings were significantly below expectations. Within two days, stocks plummeted from $34.11 to $31.5 (closing at $32 on the second day). We suggested our members to buy while stocks were low, following this advice ourselves, and made a profit of about $15. This is insignificant compared to higher-risk investments, but is still good for low-risk; however, we do not predict tremendous growth in the short-term, but rather expect stocks to remain in the $31-33 area. If you are interested in investing in a company that focuses on all-around communications, this is a great choice for a long-term investment.