A look into Broadcom Inc. (AVGO)’s deeper side

Broadcom Inc. (NASDAQ: AVGO) stock jumped 1.11% on Friday to $552.80 against a previous-day closing price of $546.74. With 1.63 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.34 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $553.15 whereas the lowest price it dropped to was $545.01. The 52-week range on AVGO shows that it touched its highest point at $677.76 and its lowest point at $462.66 during that stretch. It currently has a 1-year price target of $671.52. With its current market cap of 220.03 billion, AVGO has annualized dividend of $16.40 while the current yield stands at 2.97%. Beta for the stock currently stands at 1.11.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AVGO was up-trending over the past week, with a rise of 3.60%, but this was up by 14.54% over a month. Three-month performance dropped to -8.43% while six-month performance fell -8.39%. The stock gained 13.33% in the past year, while it has lost -16.92% so far this year. A look at the trailing 12-month EPS for AVGO yields 20.18 with Next year EPS estimates of 39.94. For the next quarter, that number is 9.56. This implies an EPS growth rate of 137.10% for this year and 8.12% for next year. EPS is expected to grow by 13.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 40.00%.

Float and Shares Shorts:

At present, 408.00 million AVGO shares are outstanding with a float of 394.30 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.96 million, which was 1.22% higher than short shares on Jun 14, 2022. In addition to Mr. Hock E. Tan as the firm’s CEO, Pres & Exec. Director, Ms. Kirsten M. Spears serves as its CFO & Chief Accounting Officer.

Institutional Ownership:

Through their ownership of 83.20% of AVGO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.45% of AVGO, in contrast to 3.00% held by mutual funds. Shares owned by individuals account for 29.94%. As the largest shareholder in AVGO with 8.74% of the stake, The Vanguard Group, Inc. holds 35,275,407 shares worth 35,275,407. A second-largest stockholder of AVGO, Capital Research & Management Co, holds 33,458,633 shares, controlling over 8.29% of the firm’s shares. Capital Research & Management Co is the third largest shareholder in AVGO, holding 29,890,115 shares or 7.40% stake. With a 3.86% stake in AVGO, the Washington Mutual Investors Fund is the largest stakeholder. A total of 15,604,817 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.83% of AVGO stock, is the second-largest Mutual Fund holder. It holds 11,435,248 shares valued at 5.56 billion. American Balanced Fund holds 2.38% of the stake in AVGO, owning 9,627,891 shares worth 4.68 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AVGO since 25 analysts follow the stock currently. There are 17 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AVGO analysts setting a high price target of $780.00 and a low target of $600.00, the average target price over the next 12 months is $677.29. Based on these targets, AVGO could surge 41.1% to reach the target high and rise by 8.54% to reach the target low. Reaching the average price target will result in a growth of 22.52% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AVGO will report FY 2022 earnings on 12/08/2022. Analysts have provided yearly estimates in a range of $38.33 being high and $36.33 being low. For AVGO, this leads to a yearly average estimate of $37.09. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Broadcom Inc. surprised analysts by $0.36 when it reported $9.07 EPS against a consensus estimate of $8.71. The surprise factor in the prior quarter was $0.26. Based on analyst estimates, the high estimate for the next quarter is $9.96 and the low estimate is $9.09. The average estimate for the next quarter is thus $9.56.

Dividends & Yield:

In terms of dividends, AVGO has a current ratio of $16.4, which is $16.4 over the trailing 12-months, while a dividend of $10.44 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and AVGO currently yields $2.88. In the past year, AVGO’s dividend yield has been $2.88, but when looking at the stock over the past five years, its yield has been $2.96. Accordingly, AVGO has a current buyback yield of $3.07. This was $3.07 for the TTM, and it was $3.44 for the past five years.

Summary of Insider Activity:

Insiders traded AVGO stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 37 while that of sell transactions has risen to 44 over the past year. The total number of shares bought during that period was 345,201 while 416,308 shares were sold.

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