Broadcom (NASDAQ:AVGO) Trading Down 4.4% – Should You Sell?

Broadcom Inc. (NASDAQ:AVGO)’s stock price was down 4.4% on Tuesday . The stock traded as low as $376.46 and last traded at $376.71. Approximately 29,291,262 shares were traded during trading, an increase of 13% from the average session volume of 25,998,006 shares. The stock had previously closed at $393.94.

Key Headlines Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom expanded its cash tender offer to $3 billion from $2.5 billion after strong investor interest, a move that signals confidence in its balance sheet and can reduce future interest expense. Article: Broadcom Inc. Announces Results and Upsize of Offers to Purchase for Cash Certain of its Outstanding Debt Securities
• Positive Sentiment: JPMorgan reiterated a bullish view, saying investors should be “aggressive buyers” of Broadcom and arguing the market underestimates the company’s long-term AI opportunity, which has helped support the stock. Article: AVGO stock jumps — JPMorgan says investors should be ‘aggressive buyers’ of Broadcom at current levels
• Positive Sentiment: Analyst commentary continues to highlight Broadcom’s AI chip pipeline and multi-year growth outlook, reinforcing investor enthusiasm for its custom silicon business. Article: Broadcom’s Massive AI Pipeline Secures Multi-Year Growth, Analyst Says
• Neutral Sentiment: Broadcom’s recent earnings and outlook remain a backdrop for the move, with the company having recently beaten EPS and revenue estimates and posted strong year-over-year growth, but investors are still weighing high expectations and valuation.

Analyst Upgrades and Downgrades

Several analysts have recently issued reports on the stock. Rosenblatt Securities reiterated a “buy” rating and issued a $500.00 target price on shares of Broadcom in a research note on Thursday, June 4th. Benchmark raised their price target on shares of Broadcom from $485.00 to $545.00 and gave the company a “buy” rating in a research report on Thursday, June 4th. Truist Financial boosted their price target on shares of Broadcom from $545.00 to $550.00 and gave the stock a “buy” rating in a report on Thursday, June 4th. Wells Fargo & Company reaffirmed an “overweight” rating and issued a $545.00 price objective (up from $430.00) on shares of Broadcom in a research report on Thursday, May 14th. Finally, Erste Group Bank upgraded shares of Broadcom from a “hold” rating to a “buy” rating in a research note on Friday, June 5th. One analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $490.13.

Broadcom Trading Up 4.7%

The stock has a market capitalization of $1.96 trillion, a PE ratio of 68.56, a price-to-earnings-growth ratio of 0.66 and a beta of 1.41. The company has a current ratio of 2.24, a quick ratio of 2.01 and a debt-to-equity ratio of 0.71. The firm has a 50-day moving average price of $408.66 and a 200-day moving average price of $363.11.

Broadcom (NASDAQ:AVGO) last issued its quarterly earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share for the quarter, topping analysts’ consensus estimates of $2.40 by $0.04. Broadcom had a net margin of 38.85% and a return on equity of 41.61%. The company had revenue of $22.19 billion for the quarter, compared to the consensus estimate of $22.13 billion. During the same period in the previous year, the firm earned $1.58 EPS. The firm’s quarterly revenue was up 47.9% on a year-over-year basis. As a group, equities analysts forecast that Broadcom Inc. will post 10.24 EPS for the current fiscal year.

Broadcom Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 22nd will be paid a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a yield of 0.6%. The ex-dividend date is Monday, June 22nd. Broadcom’s payout ratio is presently 43.33%.

Insider Activity

In other news, insider S. Ram Velaga sold 17,260 shares of the firm’s stock in a transaction that occurred on Thursday, April 9th. The shares were sold at an average price of $352.12, for a total transaction of $6,077,591.20. Following the completion of the sale, the insider owned 65,932 shares in the company, valued at $23,215,975.84. This trade represents a 20.75% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Justine Page sold 2,018 shares of Broadcom stock in a transaction that occurred 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 $6,411,892. This trade represents a 10.00% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 51,233 shares of company stock worth $18,125,134. 1.90% of the stock is owned by insiders.

Institutional Trading of Broadcom

Several hedge funds have recently made changes to their positions in the company. Brighton Jones LLC increased its holdings in Broadcom by 21.8% in the 4th quarter. Brighton Jones LLC now owns 29,683 shares of the semiconductor manufacturer’s stock worth $6,882,000 after acquiring an additional 5,322 shares during the last quarter. Revolve Wealth Partners LLC raised its stake in Broadcom by 10.4% in the 4th quarter. Revolve Wealth Partners LLC now owns 7,997 shares of the semiconductor manufacturer’s stock valued at $1,854,000 after acquiring an additional 756 shares during the period. United Bank lifted its holdings in Broadcom by 76.5% during the first quarter. United Bank now owns 2,339 shares of the semiconductor manufacturer’s stock valued at $392,000 after purchasing an additional 1,014 shares during the last quarter. Sivia Capital Partners LLC boosted its position in Broadcom by 10.1% during the second quarter. Sivia Capital Partners LLC now owns 12,693 shares of the semiconductor manufacturer’s stock worth $3,499,000 after purchasing an additional 1,160 shares during the period. Finally, Capital & Planning LLC boosted its position in Broadcom by 10.5% during the second quarter. Capital & Planning LLC now owns 3,983 shares of the semiconductor manufacturer’s stock worth $1,098,000 after purchasing an additional 378 shares during the period. 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.