Broadcom (NASDAQ:AVGO) Shares Down 0% - Should You Sell?

On Wednesday, shares of Broadcom Inc. (NASDAQ:AVGO) remained unchanged, finishing the day down 0%. The stock traded within a range, hitting a low of $162.69 before closing at $164.74. In total, approximately 16.3 million shares changed hands during the day, which represents a significant decline of 15% from its average daily trading volume of about 19.2 million shares. The previous closing price was $164.82.

Analyst Ratings

Recent analyst assessments of Broadcom have been predominantly positive. For instance, TD Cowen upgraded Broadcom to a "strong-buy" rating in a report dated September 16. Similarly, JPMorgan Chase & Co. raised their price target on Broadcom's stock from $200.00 to $210.00 with an "overweight" rating noted on September 6. Also, The Goldman Sachs Group increased their price target from $185.00 to $190.00, maintaining a "buy" stance as well. However, Rosenblatt Securities adjusted their target price down significantly from $2,400.00 to $240.00 but retained a "buy" rating. Furthermore, Benchmark reiterated a "buy" recommendation with a price target of $210.00. Among all analysts, two have rated the stock as a hold, twenty-three as a buy, and one as a strong buy. The average rating based on MarketBeat data is currently a "Moderate Buy" with a target price of $195.96.

Current Stock Overview

The current fifty-day moving average for Broadcom stands at $173.76, while the 200-day moving average is $161.09. Broadcom has a market capitalization of approximately $769.43 billion and a price-to-earnings (P/E) ratio of 143.13. Notably, the price-to-earnings-growth (PEG) ratio is 1.94, indicating some growth expectations are embedded in the price. The company's beta is 1.17, suggesting that it tends to follow market trends. Additional key financial metrics include a debt-to-equity ratio of 1.02, a current ratio of 1.04, and a quick ratio of 0.94.

Financial Performance

Broadcom's most recent quarterly earnings report, released on September 5, showed positive results. The semiconductor company recorded earnings of $1.24 per share, exceeding the expected $1.20 by $0.04. The quarterly revenue reached $13.07 billion, slightly above analysts' predictions of $12.98 billion. The firm's net profit margin was 10.88%, with a solid return on equity of 30.12%. Compared to the same period last year, the revenue reflected a growth of 47.3% year-over-year. Analysts predict that Broadcom Inc. will achieve an earnings forecast of 3.78 per share for the current year.

Dividend Announcement

In addition to its stock performance, Broadcom has recently announced an increase in its quarterly dividend. The latest payment was distributed on September 30 to shareholders on record as of September 19. This dividend amounted to $0.53 per share, which translates to an annualized dividend yield of 1.29%. The most recent dividend reflects an increase from their prior payout of the same amount. Currently, Broadcom's dividend payout ratio is high at 184.19%, indicating the proportion of earnings paid out as dividends.

Insider Trading Activity

Recent insider transactions also provide insights into the company’s stock dynamics. Mark David Brazeal, an insider, sold 18,900 shares on October 9 at an average price of $182.88, totaling approximately $3.46 million. Post-sale, Brazeal retains ownership of 380,560 shares valued at around $69.6 million, indicating a 4.73% reduction in his stake. Additionally, CEO Hock E. Tan sold 150,000 shares on September 24 for about $25.94 million, resulting in an 11.26% decrease in his ownership. In the past 90 days, insiders have sold shares totaling over $53.5 million, with 2.00% of the stock held by inside investors.

Institutional Investments

The institutional interest in Broadcom has also seen some notable changes. For example, Lion Street Advisors LLC raised its stake by 1.9% during the second quarter. They now own 324 shares valued at about $520,000. Optimum Investment Advisors increased its position by 0.6% in the same quarter, bringing their total holdings to 1,409 shares worth $2.26 million. Other firms like Anderson Hoagland & Co. and Wealth Group Ltd. reported minor increases in their shareholdings as well. Overall, institutional investors hold a significant 76.43% of the company's stock.

Company Overview

Broadcom Inc. specializes in designing and developing a wide array of semiconductor devices, with a focus on complex digital and mixed-signal products as well as analog III-V based items. The company operates across two primary segments: Semiconductor Solutions and Infrastructure Software.

Final Thoughts

Whether to sell Broadcom stocks or hold them can depend on individual risk tolerance and investment strategy. Analysts are generally optimistic, yet insider selling could raise questions. Investors should weigh these factors before making any decisions.

Broadcom, Stocks, Investment