Insider Buying Report: Broadcom Inc (AVGO:US)

Mohammad Owais Zubair 30 September 2020

Broadcom Inc (AVGO:US)

12-month performance: +32%
Insider activity: Bullish
Insider buying pattern: Large purchase from Chairman
Recent news: Good Q3 results

When a top-level insider makes a large purchase in their own company, investors should take note. It’s not a stretch to say that these individuals are some of the most informed participants in the market.

Here, we are going to highlight a substantial purchase from a top-level insider at Broadcom Inc (AVGO). Broadcom is a global technology company that specializes in semiconductor and infrastructure software solutions. It’s listed on the NASDAQ Global Select Market and currently has a market capitalization of $147 billion.

Broadcom: insider buying

What has caught our attention here is a large purchase from Broadcom’s Co-Founder and Chairman of the Board Henry Samueli. Form 4 filings show that on 18 September, the insider purchased 101,740 Broadcom shares at a price of $361.45 per share. The total cost of the purchase was $36.8 million.

AVGO-US (chart)    Source: 2iQ Research

Top-level insider

This insider purchase is significant for a couple of reasons. Firstly, Samueli is very much a top-level insider. Having co-founded Broadcom Corporation in 1991 and served as Chief Technical Officer for many years, it’s likely he has unique insights into the company’s operations and technologies.

Secondly, Samueli doesn’t buy stock very often. This purchase – which is very large in size – is his first in over five years. This suggests the stock is worth a closer look right now.

Poised to benefit from 5G rollout

Broadcom recently issued a solid set of Q3 results. For the quarter, revenue was up 6% on last year. Looking ahead, the company looks well placed for further growth on the back of the rollout of 5G. Recently, the company advised that it is expecting revenue of $6.4 billion for Q4 plus or minus $150 million. This was above analysts’ forecasts.

It’s worth noting that a number of brokers have lifted their price targets for Broadcom stock recently. For example, on 24 September, Piper Sandler lifted its price target from $380 to $400. Meanwhile, on 4 September, Credit Suisse raised its price target from $400 to $420.

In light of these developments, we see the insider buying here as a bullish signal. The company has momentum right now, and the Chairman clearly believes the stock has the potential to move higher.
    

Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.

Getting the most of Insider Trading Data - Free Book

Download
ebook-sample