Avago Remains Undervalued

For instance, over the past three years Avago's growth has arrived above the peer median. This is a group which also includes Texas Instruments (TXN) and Skyworks Solutions (SWKS). During that span Avago has averaged 17% revenue growth vs. the group's 7%. Likewise, Avago's earnings growth has consistently exceeded its peers by 2%.

These factors suggests the stock remains severely undervalued -- especially following its 7% slide last Friday. This has now placed Avago's price-to-earnings ratio at 13 compared to its peer median P/E which registers at 20. What's more, with the smartphone market expected to continue to grow, Avago should continue to outperform its rivals heading into 2013. Investors would be wise to load up on this stock now.

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At the time of publication, the author held no position in any of the stocks mentioned.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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