Broadcom (NASDAQ:AVGO) Trading Down 1% - Should You Sell?

Key Points

• Broadcom's stock price decreased by 1% to $294.73, with a significant drop in trading volume of 83% compared to the average session.
• Analysts are generally optimistic about Broadcom, with 27 buy ratings and target prices ranging from $301.00 to $400.00, reflecting strong potential for growth.
• The company recently announced a $10 billion share repurchase program, indicating confidence in its stock valuation, and declared a quarterly dividend of $0.59.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s stock price fell 1% during mid-day trading on Tuesday . The company traded as low as $291.45 and last traded at $294.73. 4,449,346 shares traded hands during trading, a decline of 83% from the average session volume of 26,656,971 shares. The stock had previously closed at $297.72.

Analyst Upgrades and Downgrades

A number of equities research analysts have weighed in on AVGO shares. Redburn Atlantic started coverage on Broadcom in a report on Wednesday, May 28th. They issued a "buy" rating and a $301.00 target price on the stock. Evercore ISI reissued an "outperform" rating and issued a $304.00 price objective (up from $267.00) on shares of Broadcom in a research note on Friday, June 6th. The Goldman Sachs Group began coverage on Broadcom in a research report on Thursday, July 10th. They issued a "buy" rating and a $315.00 target price for the company. HSBC raised Broadcom from a "hold" rating to a "buy" rating and set a $400.00 price objective for the company in a report on Tuesday, June 24th. Finally, Mizuho upped their target price on Broadcom from $315.00 to $320.00 and gave the company an "outperform" rating in a report on Wednesday, July 16th. One research analyst has rated the stock with a hold rating, twenty-seven have assigned a buy rating and three have issued a strong buy rating to the company. According to MarketBeat, the stock presently has an average rating of "Buy" and an average target price of $294.92.

Broadcom Trading Down 0.7%

The stock has a market cap of $1.39 trillion, a PE ratio of 110.86, a price-to-earnings-growth ratio of 2.05 and a beta of 1.15. The company has a debt-to-equity ratio of 0.89, a current ratio of 1.08 and a quick ratio of 0.98. The stock has a 50-day moving average price of $267.94 and a two-hundred day moving average price of $224.92.

Broadcom (NASDAQ:AVGO - Get Free Report) last released its quarterly earnings results on Thursday, June 5th. The semiconductor manufacturer reported $1.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.57 by $0.01. The business had revenue of $15 billion for the quarter, compared to analyst estimates 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% on a year-over-year basis. During the same period in the previous year, the company earned $10.96 earnings per share. Sell-side analysts forecast that Broadcom Inc. will post 5.38 earnings per share for the current fiscal year.

Broadcom Dividend Announcement

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

Broadcom declared that its Board of Directors has authorized a share 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 stock through open market purchases. Stock repurchase programs are typically an indication that the company's board believes its stock is undervalued.

Insiders Place Their Bets

In related news, CFO Kirsten M. Spears sold 56,310 shares of the company's stock in a transaction dated Wednesday, June 18th. The shares were sold at an average price of $251.75, for a total transaction of $14,176,042.50. Following the completion of the transaction, the chief financial officer owned 361,937 shares in the company, valued at $91,117,639.75. This represents a 13.46% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Charlie B. Kawwas sold 10,000 shares of the company's stock in a transaction dated Wednesday, June 11th. The stock was sold at an average price of $252.88, for a total transaction of $2,528,800.00. Following the transaction, the insider owned 789,784 shares of the company's stock, valued at approximately $199,720,577.92. This trade represents a 1.25% decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 830,516 shares of company stock valued at $217,224,641. Insiders own 2.00% of the company's stock.

Institutional Trading of Broadcom

Several hedge funds have recently made changes to their positions in the company. Barnes Dennig Private Wealth Management LLC acquired a new stake in shares of Broadcom in the 1st quarter valued at $25,000. Cheviot Value Management LLC purchased a new stake in shares of Broadcom in the first quarter valued at about $25,000. Inlight Wealth Management LLC purchased a new stake in shares of Broadcom in the first quarter valued at about $26,000. Sawyer & Company Inc lifted its holdings in shares of Broadcom by 62.1% in 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 in the last quarter. Finally, Sunbeam Capital Management LLC acquired a new position in shares of Broadcom in the fourth quarter valued at approximately $28,000. 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.

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