Insider Decision: Hock E Tan Offloads $50.00M Worth Of Broadcom Stock

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

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, Tan sold 148,514 shares of Broadcom. The total transaction value is $50,000,208.

Monitoring the market, Broadcom's shares down by 1.07% at $360.18 during Tuesday's morning.

Delving into Broadcom's Background

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.

Key Indicators: Broadcom's Financial Health

Revenue Growth: Over the 3 months period, Broadcom showcased positive performance, achieving a revenue growth rate of 22.03% as of 31 July, 2025. This reflects a substantial increase in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Information Technology sector.

Key Profitability Indicators:

• Gross Margin: Achieving a high gross margin of 67.09%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Broadcom's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.88.

Debt Management: Broadcom's debt-to-equity ratio stands notably higher than the industry average, reaching 0.88. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: Broadcom's stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 93.36.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 29.39 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 55.16 reflects market recognition of Broadcom's value, positioning it as more highly valued compared to industry peers.

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

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Why Insider Transactions Are Important

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

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.

Transaction Codes To Focus On

When analyzing transactions, investors tend to focus on those in the open market, 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.