Putting his chips on Broadcom

  @FortuneMagazine October 31, 2013: 6:55 AM ET
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"We don't buy things when they're pretty," says Anthony Lombardi, co-manager of the $3.6 billion Delaware Value Fund. He tempers his contrarianism by picking companies with commanding market share and sound balance sheets. Result: 17% average annual returns over the past five years, putting the fund in the top 7% of its cohort. Recently the fund has been trolling the lagging tech sector. One new 2013 holding is chipmaker Broadcom.

1. Its chips are everywhere

Lombardi started buying shares before Broadcom announced a second-quarter loss, which pummeled the stock. He then bought more. Why? The hit was largely caused by a goodwill write-down from a smart 2012 acquisition, he says. Meanwhile, Broadcom chips dominate in modems, cable boxes, Wi-Fi, Bluetooth, and GPS. "There's an insatiable appetite for everyone to be connected 24/7 everywhere they go," he says. "Broadcom products are at every touch point in every device and every piece of infrastructure."

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