Broadcom (NASDAQ:AVGO) Trading Up 2.6% - Still a Buy?

Key Points

• Broadcom's stock price increased by 2.6%, trading between $296.27 and $297.37 with a significant drop in volume compared to its average.
• Analysts have projected a consensus target price of $294.92 for Broadcom, with Oppenheimer and JPMorgan raising price targets to $305.00 and $325.00, respectively.
• The company announced a quarterly dividend of $0.59 per share, representing a dividend yield of 0.8%, and a stock buyback program to repurchase up to $10 billion in shares.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) was up 2.6% during trading on Monday . The company traded as high as $297.37 and last traded at $296.27. Approximately 4,455,812 shares were traded during trading, a decline of 83% from the average daily volume of 26,726,441 shares. The stock had previously closed at $288.64.

Wall Street Analyst Weigh In

AVGO has been the subject of several research analyst reports. Wells Fargo & Company increased their target price on Broadcom from $230.00 to $255.00 and gave the company an "equal weight" rating in a research note on Friday, June 6th. UBS Group increased their target price on Broadcom from $270.00 to $290.00 and gave the company a "buy" rating in a research note on Friday, June 6th. HSBC upgraded Broadcom from a "hold" rating to a "buy" rating and set a $400.00 target price for the company in a research note on Tuesday, June 24th. Wall Street Zen upgraded Broadcom from a "hold" rating to a "buy" rating in a research note on Saturday, July 5th. Finally, Bank of America lifted their price objective on shares of Broadcom from $240.00 to $300.00 and gave the stock a "buy" rating in a report on Friday, June 6th. One equities research analyst has rated the stock with a hold rating, twenty-seven have issued a buy rating and three have given a strong buy rating to the company's stock. According to MarketBeat, the company has an average rating of "Buy" and a consensus target price of $294.92.

Broadcom Price Performance

The firm has a market capitalization of $1.38 trillion, a P/E ratio of 109.97, a price-to-earnings-growth ratio of 2.05 and a beta of 1.15. The business has a 50-day moving average of $267.94 and a 200 day moving average of $224.92. The company has a current ratio of 1.08, a quick ratio of 0.98 and a debt-to-equity ratio of 0.89.

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

Broadcom Announces Dividend

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

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

Insider Transactions at Broadcom

In other news, Director Henry Samueli sold 473,898 shares of the business's stock in a transaction dated Wednesday, June 25th. The stock was sold at an average price of $265.33, for a total value of $125,739,356.34. Following the transaction, the director directly owned 38,188,575 shares in the company, valued at $10,132,574,604.75. The trade was a 1.23% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, insider Mark David Brazeal sold 50,000 shares of Broadcom stock in a transaction dated Monday, June 23rd. The stock was sold at an average price of $253.28, for a total value of $12,664,000.00. Following the completion of the sale, 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. In the last three months, insiders have sold 830,516 shares of company stock worth $217,224,641. 2.00% of the stock is owned by insiders.

Institutional Trading of Broadcom

A number of hedge funds have recently bought and sold shares of the stock. Hutchens & Kramer Investment Management Group LLC grew its position in Broadcom by 29.3% during the 2nd quarter. Hutchens & Kramer Investment Management Group LLC now owns 2,429 shares of the semiconductor manufacturer's stock worth $643,000 after purchasing an additional 551 shares during the period. Torray Investment Partners LLC grew its position in Broadcom by 107.9% during the 2nd quarter. Torray Investment Partners LLC now owns 148,683 shares of the semiconductor manufacturer's stock worth $40,984,000 after purchasing an additional 77,183 shares during the period. Ceera Investments LLC acquired a new stake in Broadcom during the 2nd quarter worth about $262,000. Telos Capital Management Inc. grew its position in Broadcom by 11.4% during the 2nd quarter. Telos Capital Management Inc. now owns 4,384 shares of the semiconductor manufacturer's stock worth $1,208,000 after purchasing an additional 449 shares during the period. Finally, EPG Wealth Management LLC grew its position in Broadcom by 0.9% during the 2nd quarter. EPG Wealth Management LLC now owns 12,578 shares of the semiconductor manufacturer's stock worth $3,467,000 after purchasing an additional 107 shares during the period. Hedge funds and other institutional investors own 76.43% of the company's stock.

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.