Some Broadcom Inc. (NASDAQ:AVGO) shareholders may be a little concerned to see that the President, Hock Tan, recently sold a substantial US$11m worth of stock at a price of US$240 per share. However, that sale only accounted for 2.4% of their holding, so arguably it doesn't say much about their conviction.
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The Last 12 Months Of Insider Transactions At Broadcom
Notably, that recent sale by President Hock Tan was not the only time they sold Broadcom shares this year. Earlier in the year, they fetched US$173 per share in a -US$26m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$242. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 10% of Hock Tan's holding.
Insiders in Broadcom didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Broadcom better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Broadcom Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Broadcom insiders own 1.3% of the company, worth about US$15b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Broadcom Tell Us?
Insiders sold Broadcom shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Broadcom and we suggest you have a look.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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About NasdaqGS:AVGO
Broadcom
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.
High growth potential with adequate balance sheet.