Cantillon Capital Management LLC Trims Holdings in Broadcom Inc. $AVGO

Key Points

• Cantillon Capital Management trimmed its Broadcom stake by 2.0% in the fourth quarter, but Broadcom remains its largest holding at about 8.6% of the portfolio, worth roughly $1.59 billion.
• Broadcom shares were down about 5.1% as the stock faced broader semiconductor selling and valuation concerns, even after a strong earnings report and continued bullish analyst coverage.
• The company recently posted quarterly EPS of $2.44 on revenue of $22.19 billion, raised by nearly 48% year over year, and also announced a $0.65 quarterly dividend payable June 30.

Cantillon Capital Management LLC lowered its stake in shares of Broadcom Inc. (NASDAQ:AVGO - Free Report) by 2.0% during the 4th quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 4,604,301 shares of the semiconductor manufacturer's stock after selling 95,438 shares during the period. Broadcom accounts for about 8.6% of Cantillon Capital Management LLC's investment portfolio, making the stock its largest position. Cantillon Capital Management LLC owned about 0.10% of Broadcom worth $1,593,549,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other institutional investors and hedge funds have also recently modified their holdings of the stock. Miller Global Investments LLC purchased a new position in shares of Broadcom in the fourth quarter valued at $31,000. Nvest Wealth Strategies Inc. purchased a new position in shares of Broadcom in the fourth quarter valued at $33,000. Family CFO Inc purchased a new position in shares of Broadcom in the fourth quarter valued at $35,000. PayPay Securities Corp grew its holdings in shares of Broadcom by 88.9% in the fourth quarter. PayPay Securities Corp now owns 119 shares of the semiconductor manufacturer's stock valued at $41,000 after purchasing an additional 56 shares in the last quarter. Finally, Camelot Portfolios LLC purchased a new position in shares of Broadcom in the fourth quarter valued at $45,000. Institutional investors own 76.43% of the company's stock.

Broadcom Stock Down 5.1%

NASDAQ:AVGO opened at $372.10 on Thursday. Broadcom Inc. has a twelve month low of $243.80 and a twelve month high of $495.00. The company has a market cap of $1.76 trillion, a price-to-earnings ratio of 62.02, a price-to-earnings-growth ratio of 0.71 and a beta of 1.41. The stock has a fifty day simple moving average of $401.36 and a 200-day simple moving average of $362.87. The company has a current ratio of 2.24, a quick ratio of 2.01 and a debt-to-equity ratio of 0.71.

Broadcom (NASDAQ:AVGO - Get Free Report) last released its earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share for the quarter, topping the consensus estimate of $2.40 by $0.04. Broadcom had a return on equity of 41.61% and a net margin of 38.85%.The business had revenue of $22.19 billion during the quarter, compared to the consensus estimate of $22.13 billion. During the same period last year, the company earned $1.58 earnings per share. The business's revenue for the quarter was up 47.9% compared to the same quarter last year. Analysts anticipate that Broadcom Inc. will post 9.97 EPS for the current year.

Broadcom Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Monday, June 22nd will be given a dividend of $0.65 per share. This represents a $2.60 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Monday, June 22nd. Broadcom's dividend payout ratio (DPR) is 43.33%.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Several analysts and commentators argue the pullback is overdone, pointing to Broadcom’s strong fundamentals: revenue growth of about 48%, AI semiconductor revenue up 143%, and more than $30 billion in AI bookings. Bullish pieces say the stock looks attractive on cash flow and long-term AI demand. Article Title
• Positive Sentiment: Broadcom also gained support from a major AI infrastructure tie-up with Apollo Global Management and Blackstone, which are backing a $35 billion capacity expansion for Anthropic using Broadcom’s custom chips and networking gear. That reinforces the company’s role in the AI buildout. Article Title
• Neutral Sentiment: Some analysts remain constructive on the stock over the long term, citing expected EPS growth of more than 50% over the next five years and multiple recent upgrades/price-target increases. Article Title
• Neutral Sentiment: Other coverage highlights a “buy the dip” case after the post-earnings reset, with investors watching whether AI demand and margins stay strong enough to justify the premium valuation. Article Title
• Negative Sentiment: The main headwind is that Broadcom’s stock has been hit by a broader chip rotation/correction, with semiconductor names sold off as investors take profits from the AI trade. Broadcom has been singled out as one of the biggest laggards in that move. Article Title
• Negative Sentiment: Investors are also worried that Broadcom’s premium valuation leaves little room for error after its strong quarter, especially as guidance for AI revenue was viewed as less aggressive than hoped. Article Title
• Negative Sentiment: New commentary from Broadcom’s CEO that the company will focus only on chips, not a broader AI platform strategy, appears to have unnerved some AI-focused investors and added to the selloff. Article Title

Wall Street Analysts Forecast Growth

AVGO has been the subject of a number of recent research reports. Weiss Ratings raised shares of Broadcom from a "hold (c+)" rating to a "buy (b-)" rating in a report on Wednesday, May 27th. Oppenheimer reissued an "outperform" rating and issued a $535.00 target price (up from $450.00) on shares of Broadcom in a report on Thursday, June 4th. TD Cowen reissued a "buy" rating and issued a $500.00 target price on shares of Broadcom in a report on Thursday, June 4th. Zacks Research lowered shares of Broadcom from a "strong-buy" rating to a "hold" rating in a research note on Thursday, May 21st. Finally, Jefferies Financial Group set a $550.00 price objective on shares of Broadcom and gave the stock a "buy" rating in a research note on Thursday, June 4th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and three have given a Hold rating to the company's stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $490.13.

Insider Buying and Selling at Broadcom

In other news, Director Justine Page sold 2,018 shares of Broadcom stock in a transaction on Wednesday, April 8th. The stock was sold at an average price of $353.00, for a total transaction of $712,354.00. Following the completion of the sale, the director directly owned 18,164 shares in the company, valued at approximately $6,411,892. This trade represents a 10.00% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Mark David Brazeal sold 50,488 shares of Broadcom stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $321.60, for a total value of $16,236,940.80. Following the sale, the insider owned 278,141 shares of the company's stock, valued at approximately $89,450,145.60. This trade represents a 15.36% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 324,282 shares of company stock valued at $106,425,249. 1.90% of the stock is owned by company insiders.

Broadcom Profile

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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