Broadcom (AVGO) Shares Gap Down Following Insider Selling

Broadcom Limited (NASDAQ:AVGO) gapped down before the market opened on Thursday after an insider sold shares in the company. The stock had previously closed at $255.64, but opened at $249.59. Broadcom shares last traded at $242.86, with a volume of 4962601 shares traded.

Specifically, Director Lake Group L.L.C. Silver bought 344,761 shares of the stock in a transaction dated Friday, April 13th. The shares were purchased at an average price of $247.94 per share, for a total transaction of $85,480,042.34. The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CEO Hock E. Tan sold 20,000 shares of the company’s stock in a transaction dated Thursday, February 15th. The stock was sold at an average price of $247.72, for a total value of $4,954,400.00. The disclosure for this sale can be found here. Insiders sold 98,675 shares of company stock worth $25,032,829 in the last 90 days. Company insiders own 3.30% of the company’s stock.

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A number of equities analysts have issued reports on the company. Vetr downgraded Broadcom from a “strong-buy” rating to a “buy” rating and set a $280.72 price target on the stock. in a research report on Wednesday. Zacks Investment Research upgraded Broadcom from a “hold” rating to a “buy” rating and set a $284.00 price target on the stock in a research report on Monday, March 12th. Deutsche Bank assumed coverage on Broadcom in a research report on Thursday, March 15th. They set a “buy” rating and a $325.00 price target on the stock. Canaccord Genuity reiterated a “buy” rating and set a $340.00 price target (up previously from $325.00) on shares of Broadcom in a research report on Friday, March 16th. Finally, SunTrust Banks lowered their price target on Broadcom to $335.00 and set a “buy” rating on the stock in a research report on Tuesday, March 13th. They noted that the move was a valuation call. Five equities research analysts have rated the stock with a hold rating, thirty-one have given a buy rating and one has issued a strong buy rating to the company’s stock. Broadcom presently has a consensus rating of “Buy” and a consensus price target of $314.23.

The company has a quick ratio of 5.04, a current ratio of 5.70 and a debt-to-equity ratio of 0.60. The firm has a market cap of $103,402.71, a P/E ratio of 16.98, a P/E/G ratio of 1.13 and a beta of 0.92.

Broadcom (NASDAQ:AVGO) last posted its quarterly earnings results on Thursday, March 15th. The semiconductor manufacturer reported $5.12 EPS for the quarter, beating the consensus estimate of $4.41 by $0.71. Broadcom had a return on equity of 29.50% and a net margin of 41.37%. The firm had revenue of $5.33 billion during the quarter, compared to analysts’ expectations of $5.32 billion. During the same quarter last year, the firm earned $3.63 earnings per share. The business’s revenue for the quarter was up 28.5% on a year-over-year basis. research analysts predict that Broadcom Limited will post 17.43 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which was paid on Thursday, March 29th. Investors of record on Thursday, March 22nd were issued a $1.75 dividend. This represents a $7.00 annualized dividend and a dividend yield of 2.88%. The ex-dividend date was Wednesday, March 21st. This is a boost from Broadcom’s previous quarterly dividend of $0.40. Broadcom’s dividend payout ratio (DPR) is currently 48.95%.

Broadcom announced that its board has approved a stock repurchase plan on Thursday, April 12th that authorizes the company to repurchase $12.00 billion in shares. This repurchase authorization authorizes the semiconductor manufacturer to reacquire up to 12.2% of its shares through open market purchases. Shares repurchase plans are usually an indication that the company’s board believes its shares are undervalued.

Several large investors have recently bought and sold shares of the stock. Barrow Hanley Mewhinney & Strauss LLC acquired a new stake in Broadcom during the fourth quarter worth $215,260,000. Coatue Management LLC increased its stake in Broadcom by 28.2% during the fourth quarter. Coatue Management LLC now owns 3,735,957 shares of the semiconductor manufacturer’s stock worth $959,768,000 after acquiring an additional 821,739 shares during the last quarter. BlackRock Inc. increased its stake in Broadcom by 2.1% during the fourth quarter. BlackRock Inc. now owns 24,924,233 shares of the semiconductor manufacturer’s stock worth $6,403,033,000 after acquiring an additional 508,470 shares during the last quarter. Jennison Associates LLC increased its stake in Broadcom by 8.1% during the fourth quarter. Jennison Associates LLC now owns 5,583,858 shares of the semiconductor manufacturer’s stock worth $1,434,493,000 after acquiring an additional 418,420 shares during the last quarter. Finally, Mackenzie Financial Corp increased its stake in Broadcom by 182.5% during the fourth quarter. Mackenzie Financial Corp now owns 623,367 shares of the semiconductor manufacturer’s stock worth $160,143,000 after acquiring an additional 402,712 shares during the last quarter. 89.50% of the stock is owned by hedge funds and other institutional investors.

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About Broadcom

Broadcom Limited designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other.

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