Broadcom (NASDAQ:AVGO) Trading Up 5.4% - Still a Buy?

Key Points

• Shares jumped 5.4% to about $309.32 on Tuesday with volume ~9% above average, giving Broadcom a market cap of roughly $1.46 trillion and a P/E of 60.41.
• Wall Street is broadly positive — the stock has a consensus rating of “Moderate Buy” and an average price target of $435.30, with several firms (Citigroup, Bernstein, Barclays) recently raising targets.
• Broadcom beat quarterly estimates (EPS $2.05 vs. $2.03; revenue $19.31B, up 29.5% YoY), declared a $0.65 quarterly dividend (0.8% yield), but insiders sold heavily last quarter (~403,049 shares worth $133M).

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) shares shot up 5.4% during trading on Tuesday . The company traded as high as $310.31 and last traded at $309.3150. 29,118,895 shares traded hands during trading, an increase of 9% from the average session volume of 26,792,301 shares. The stock had previously closed at $293.41.

Wall Street Analysts Forecast Growth

Several equities research analysts have recently weighed in on the company. Citigroup upped their price objective on Broadcom from $458.00 to $475.00 and gave the company a "buy" rating in a research note on Thursday, March 5th. Sanford C. Bernstein restated an "outperform" rating and set a $475.00 target price (up from $400.00) on shares of Broadcom in a research report on Friday, December 12th. Royal Bank Of Canada decreased their price target on Broadcom from $370.00 to $340.00 and set a "sector perform" rating on the stock in a research note on Monday, March 2nd. Susquehanna reiterated a "positive" rating and set a $450.00 price objective (up from $400.00) on shares of Broadcom in a research note on Thursday, December 4th. Finally, Barclays reissued an "overweight" rating and set a $500.00 price objective (up from $450.00) on shares of Broadcom in a report on Friday, December 12th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and three have assigned a Hold rating to the company's stock. Based on data from MarketBeat, Broadcom has an average rating of "Moderate Buy" and a consensus price target of $435.30.

Broadcom Stock Up 5.4%

The firm has a market capitalization of $1.46 trillion, a price-to-earnings ratio of 60.41, a P/E/G ratio of 0.64 and a beta of 1.22. The firm has a fifty day moving average price of $325.83 and a 200 day moving average price of $344.28. The company has a current ratio of 1.90, a quick ratio of 1.73 and a debt-to-equity ratio of 0.80.

Broadcom (NASDAQ:AVGO - Get Free Report) last issued its quarterly earnings data on Wednesday, March 4th. The semiconductor manufacturer reported $2.05 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.03 by $0.02. The firm had revenue of $19.31 billion during the quarter, compared to the consensus estimate of $19.10 billion. Broadcom had a return on equity of 38.61% and a net margin of 36.57%.The business's revenue for the quarter was up 29.5% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.60 EPS. Sell-side analysts anticipate that Broadcom Inc. will post 5.38 EPS for the current fiscal year.

Broadcom Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Tuesday, March 31st. Investors of record on Monday, March 23rd will be given a dividend of $0.65 per share. The ex-dividend date is Monday, March 23rd. This represents a $2.60 annualized dividend and a yield of 0.8%. Broadcom's dividend payout ratio is 50.78%.

Insider Activity

In other news, insider Mark David Brazeal sold 50,488 shares of the company's stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total transaction of $16,236,940.80. Following the transaction, the insider directly owned 278,141 shares in the company, valued at approximately $89,450,145.60. This represents a 15.36% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Charlie B. Kawwas sold 39,116 shares of the stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $321.61, for a total transaction of $12,580,096.76. Following the sale, the insider directly owned 74,626 shares in the company, valued at $24,000,467.86. This trade represents a 34.39% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 403,049 shares of company stock worth $133,459,315. 1.90% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the company. ROSS JOHNSON & Associates LLC lifted its position in Broadcom by 1,320.0% during the 4th quarter. ROSS JOHNSON & Associates LLC now owns 71 shares of the semiconductor manufacturer's stock valued at $25,000 after purchasing an additional 66 shares during the period. SWAN Capital LLC grew its position in shares of Broadcom by 261.9% during the 4th quarter. SWAN Capital LLC now owns 76 shares of the semiconductor manufacturer's stock worth $26,000 after buying an additional 55 shares during the period. Miller Global Investments LLC acquired a new stake in shares of Broadcom during the 4th quarter worth approximately $31,000. JCIC Asset Management Inc. acquired a new stake in shares of Broadcom during the 3rd quarter worth approximately $31,000. Finally, Nvest Wealth Strategies Inc. bought a new stake in shares of Broadcom during the fourth quarter worth approximately $33,000. 76.43% of the stock is currently owned by institutional investors.

About Broadcom

Broadcom Inc NASDAQ: AVGO is a global technology company that designs, develops and supplies semiconductor and infrastructure software solutions for a broad range of markets. The company's semiconductor business provides components and systems for wired and wireless communications, enterprise and cloud storage, networking and broadband access, serving original equipment manufacturers, cloud service providers, telecommunications carriers and industrial customers worldwide. Broadcom is headquartered in Irvine, California, and operates globally with research, development and sales organizations across North America, Europe and Asia.

On the semiconductor side, Broadcom's portfolio includes system-on-chip (SoC) and application-specific integrated circuit (ASIC) solutions, radio-frequency and connectivity components, Ethernet switching and PHY devices, storage adapters and controllers, optical transceivers and other networking silicon.

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