Broadcom (NASDAQ:AVGO) Trading Down 1.1% - Should You Sell?

Key Points

• Broadcom's stock price dropped by 1.1% on Thursday, closing at $299.43, significantly lower than its average session volume, which was down by 79% to 5,670,351 shares.
• Analysts remain optimistic, with target price revisions; notable upgrades include Susquehanna's increase from $280 to $300 and UBS's raise from $270 to $290, contributing to an average target price of $294.92.
• Broadcom recently paid a quarterly dividend of $0.59, with a current yield of 0.8% and an announced share buyback program of $10 billion indicating strong company confidence.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) traded down 1.1% during mid-day trading on Thursday . The company traded as low as $298.38 and last traded at $299.43. 5,670,351 shares traded hands during mid-day trading, a decline of 79% from the average session volume of 26,782,473 shares. The stock had previously closed at $302.62.

Analysts Set New Price Targets

A number of analysts have recently issued reports on the stock. UBS Group lifted their price objective on shares of Broadcom from $270.00 to $290.00 and gave the company a "buy" rating in a report on Friday, June 6th. Wells Fargo & Company boosted their target price on shares of Broadcom from $230.00 to $255.00 and gave the company an "equal weight" rating in a research report on Friday, June 6th. Wall Street Zen raised shares of Broadcom from a "hold" rating to a "buy" rating in a research report on Saturday, July 5th. Hsbc Global Res raised Broadcom from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, June 24th. Finally, Mizuho upped their price objective on Broadcom from $315.00 to $320.00 and gave the company an "outperform" rating in a research note on Wednesday, July 16th. One analyst has rated the stock with a hold rating, twenty-seven have issued a buy rating and three have issued a strong buy rating to the company's stock. Based on data from MarketBeat, Broadcom currently has a consensus rating of "Buy" and an average target price of $294.92.

Broadcom Stock Down 1.1%

The company has a current ratio of 1.08, a quick ratio of 0.98 and a debt-to-equity ratio of 0.89. The stock has a market capitalization of $1.37 trillion, a PE ratio of 108.70, a P/E/G ratio of 2.15 and a beta of 1.12. The stock's fifty day simple moving average is $265.36 and its 200-day simple moving average is $224.11.

Broadcom (NASDAQ:AVGO - Get Free Report) last posted its quarterly earnings data on Thursday, June 5th. The semiconductor manufacturer reported $1.58 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.57 by $0.01. The firm had revenue of $15 billion for the quarter, compared to the consensus estimate of $14.98 billion. Broadcom had a net margin of 22.64% and a return on equity of 35.49%. The business's revenue for the quarter was up 20.2% compared to the same quarter last year. During the same period in the previous year, the firm earned $10.96 EPS. As a group, sell-side analysts forecast that Broadcom Inc. will post 5.38 EPS for the current fiscal year.

Broadcom Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Monday, June 30th. Shareholders of record on Friday, June 20th were issued a dividend of $0.59 per share. This represents a $2.36 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend was Friday, June 20th. Broadcom's payout ratio is currently 88.39%.

Broadcom declared that its board has initiated a share buyback program on Monday, April 7th that permits the company to buyback $10.00 billion in outstanding shares. This buyback authorization permits the semiconductor manufacturer to repurchase up to 1.4% of its shares through open market purchases. Shares buyback programs are often a sign that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In related news, CFO Kirsten M. Spears sold 56,310 shares of the business's stock in a transaction dated Wednesday, June 18th. The shares were sold at an average price of $251.75, for a total value of $14,176,042.50. Following the transaction, the chief financial officer directly owned 361,937 shares of the company's stock, valued at approximately $91,117,639.75. The trade was a 13.46% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Mark David Brazeal sold 50,000 shares of the business's stock in a transaction dated Monday, June 23rd. The stock was sold at an average price of $253.28, for a total transaction of $12,664,000.00. Following the completion of the transaction, the insider directly owned 415,956 shares in the company, valued at $105,353,335.68. This trade represents a 10.73% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 830,516 shares of company stock worth $217,224,641 in the last ninety days. Corporate insiders own 2.00% of the company's stock.

Hedge Funds Weigh In On Broadcom

A number of hedge funds and other institutional investors have recently made changes to their positions in AVGO. Sawyer & Company Inc lifted its holdings in Broadcom by 62.1% during the second quarter. Sawyer & Company Inc now owns 94 shares of the semiconductor manufacturer's stock valued at $26,000 after purchasing an additional 36 shares during the last quarter. Legend Financial Advisors Inc. purchased a new stake in Broadcom during the second quarter valued at about $28,000. LGT Financial Advisors LLC purchased a new stake in Broadcom during the second quarter valued at about $31,000. Sunbeam Capital Management LLC purchased a new stake in Broadcom during the fourth quarter valued at about $28,000. Finally, Maseco LLP purchased a new stake in Broadcom during the second quarter valued at about $34,000. 76.43% of the stock is owned by hedge funds and other institutional investors.

About Broadcom

Broadcom Inc designs, develops, and supplies various 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 in two segments, Semiconductor Solutions and Infrastructure Software.