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Re-underwriting AVGO from the filings (DD)
Broadcom Inc. (AVGO)
Quarterly check-in on a quality name. Here is what the balance-sheet checklist looked at.
WHAT THEY DO
Broadcom Inc.
THE SETUP
AVGO trades at $351.19.
Performance: -5.0% over a month, +13.8% over six, +6.1% over a year.
Sits -26.8% from its 52-week high and +20.1% off the low.
RSI(14) at 44, neutral.
Price vs 200-day average: -4.1%.
BALANCE SHEET
Financial health 9.5/10 (strong). No red flags against these benchmarks.
✓ Net debt vs cash flow: 1.9y (benchmark < 4 years).
✓ Current ratio: 1.71 (benchmark > 1.5).
✓ Return on equity: 44.2% (benchmark > 15%).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 8.3/10.
Falls short of Buffett's bar on a fair price.
✓ Earns 44.2% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 75.5% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $50.9B is 1.7x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Produces $30.6B of free cash flow an owner could pocket without starving the business. It has improved over the last 4 years.
✓ Earnings changed 215.3% year on year, he wants compounding, not recovering.
✗ Trades at 44.7x trailing earnings. Buffett's fourth filter is a sensible price tag. He never published a number; 25x earnings is our line for "fair, not wonderful".
NEXT CATALYST
Earnings on 2026-12-09.
Street expects EPS of $3.83 on revenue of $34.9B.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 21 sells worth $280.5M across 5 filers.
• Samueli Henry (Director): sale of 230,031 shares at $355.50 ($81.8M).
• Brazeal Mark David (Chief Legal & Corp Affairs Ofc): sale of 25,000 shares at $401.33 ($10.0M).
• Delly Gayla J (Director): sale of 1,890 shares at $385.38 ($728.4K).
THE READ
Health score 9.5/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +6.1% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
AVGO6 Months
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