Broadcom (NASDAQ:AVGO) Shares Gap Down – Should You Sell?

Shares of Broadcom Inc. (NASDAQ:AVGO) gapped down prior to trading on Friday . The stock had previously closed at $259.93, but opened at $251.14. Broadcom shares last traded at $251.61, with a volume of 10,429,403 shares.

Wall Street Analysts Forecast Growth

A number of brokerages have recently commented on AVGO. Evercore ISI lifted their price target on shares of Broadcom from $267.00 to $304.00 and gave the stock an “outperform” rating in a research note on Friday. Wells Fargo & Company lifted their price target on shares of Broadcom from $230.00 to $255.00 and gave the stock an “equal weight” rating in a research note on Friday. Barclays reduced their price target on shares of Broadcom from $260.00 to $215.00 and set an “overweight” rating for the company in a research note on Tuesday, April 22nd. Oppenheimer boosted their target price on shares of Broadcom from $225.00 to $265.00 and gave the company an “outperform” rating in a research report on Friday, May 30th. Finally, Morgan Stanley boosted their target price on shares of Broadcom from $260.00 to $270.00 and gave the company an “overweight” rating in a research report on Friday. Two research analysts have rated the stock with a hold rating, twenty-seven have assigned a buy rating and one has issued a strong buy rating to the company. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus target price of $270.25.

Broadcom Price Performance

The firm’s fifty day moving average price is $203.73 and its 200 day moving average price is $206.52. The company has a quick ratio of 1.07, a current ratio of 1.17 and a debt-to-equity ratio of 0.98. The stock has a market cap of $1.16 trillion, a PE ratio of 201.43, a P/E/G ratio of 2.29 and a beta of 1.11.

Broadcom (NASDAQ:AVGO) last released its earnings results on Thursday, June 5th. The semiconductor manufacturer reported $1.58 EPS for the quarter, topping the consensus estimate of $1.57 by $0.01. Broadcom had a net margin of 11.43% and a return on equity of 28.00%. The firm had revenue of $15 billion for the quarter, compared to the consensus estimate of $14.98 billion. During the same quarter in the previous year, the firm earned $10.96 earnings per share. The company’s quarterly revenue was up 20.2% compared to the same quarter last year. As a group, equities analysts expect that Broadcom Inc. will post 5.38 EPS for the current fiscal year.

Broadcom Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Monday, June 30th. Stockholders of record on Friday, June 20th will be issued a $0.59 dividend. This represents a $2.36 annualized dividend and a dividend yield of 0.96%. The ex-dividend date is Friday, June 20th. Broadcom’s dividend payout ratio (DPR) is presently 113.46%.

Broadcom declared that its board has approved a stock repurchase program on Monday, April 7th that authorizes the company to repurchase $10.00 billion in outstanding shares. This repurchase authorization authorizes the semiconductor manufacturer to buy up to 1.4% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company’s board believes its shares are undervalued.

Insider Activity at Broadcom

In related news, Director Justine Page sold 800 shares of the company’s stock in a transaction on Wednesday, May 14th. The shares were sold at an average price of $230.19, for a total transaction of $184,152.00. Following the sale, the director now owns 26,182 shares of the company’s stock, valued at $6,026,834.58. This represents a 2.96% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Mark David Brazeal sold 30,000 shares of the company’s stock in a transaction on Monday, March 24th. The shares were sold at an average price of $194.65, for a total transaction of $5,839,500.00. Following the sale, the insider now directly owns 490,956 shares in the company, valued at approximately $95,564,585.40. The trade was a 5.76% decrease in their position. The disclosure for this sale can be found here. Insiders have sold a total of 720,576 shares of company stock valued at $131,249,694 over the last 90 days. 2.00% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Broadcom

A number of hedge funds have recently bought and sold shares of AVGO. Barnes Dennig Private Wealth Management LLC purchased a new stake in Broadcom during the first quarter valued at $25,000. Cheviot Value Management LLC bought a new position in shares of Broadcom in the first quarter worth about $25,000. Canton Hathaway LLC bought a new position in shares of Broadcom in the fourth quarter worth about $26,000. Rialto Wealth Management LLC bought a new position in shares of Broadcom in the fourth quarter worth about $26,000. Finally, Inlight Wealth Management LLC bought a new position in shares of Broadcom in the first quarter worth about $26,000. 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.