Insider Transaction: Hock E Tan Sells $29.78M Worth Of Broadcom Shares

Hock E Tan, President and CEO at Broadcom (NASDAQ:AVGO), executed a substantial insider sell on June 16, according to an SEC filing.

What Happened: Tan's decision to sell 117,758 shares of Broadcom was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total value of the sale is $29,782,175.

Monitoring the market, Broadcom's shares down by 0.96% at $249.67 during Tuesday's morning.

All You Need to Know About Broadcom

Broadcom is the sixth-largest semiconductor company globally and has expanded into various software businesses, with over $30 billion in annual revenue. It sells 17 core semiconductor product lines across wireless, networking, broadband, storage, and industrial markets. It is primarily a fabless designer but holds some manufacturing in-house, like for its best-of-breed FBAR filters that sell into the Apple iPhone. In software, it sells virtualization, infrastructure, and security software to large enterprises, financial institutions, and governments.Broadcom is the product of consolidation. Its businesses are an amalgamation of former companies like legacy Broadcom and Avago Technologies in chips, as well as Brocade, CA Technologies, and Symantec in software.

A Deep Dive into Broadcom's Financials

Revenue Growth: Broadcom displayed positive results in 3 months. As of 30 April, 2025, the company achieved a solid revenue growth rate of approximately 20.16%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Information Technology sector.

Navigating Financial Profits:

• Gross Margin: The company excels with a remarkable gross margin of 67.96%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Broadcom's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.05.

Debt Management: Broadcom's debt-to-equity ratio stands notably higher than the industry average, reaching 0.97. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Market Valuation:

• Price to Earnings (P/E) Ratio: Broadcom's current Price to Earnings (P/E) ratio of 92.01 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 21.34 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Broadcom's EV/EBITDA ratio, surpassing industry averages at 41.12, positions it with an above-average valuation in the market.

Market Capitalization Analysis: With a profound presence, the company's market capitalization is above industry averages. This reflects substantial size and strong market recognition.

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Uncovering the Importance of Insider Activity

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Broadcom's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.

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