Broadcom CEO Hock Tan Just Sold $24 Million Worth of AVGO Stock. Should You Dump Shares Too?

Core Viewpoint - Insider selling at Broadcom has raised investor concerns, but analysts remain optimistic about the stock's potential for growth [1][2]. Group 1: Insider Selling - CEO Hock Tan sold stock worth $24.3 million, offloading 70,000 shares at $347.3, retaining a total of 908,474 shares [1]. - CFO Kirsten Spears and Chief Legal Officer Mark Brazeal also sold stock worth $10 million [1]. - While insider selling typically raises concerns, it is not unusual, and analysts have encouraged buying during the same period [2]. Group 2: Analyst Perspectives - Mizuho upgraded the target price for Broadcom, and Cathie Wood of ARK Invest purchased over $10 million worth of shares, indicating continued investor interest [2]. - The stock's one-year returns of 50% are comparable to the 51% returns of the iShares Semiconductor ETF (SOXX) [4]. Group 3: Company Valuation - Broadcom's forward P/E ratio is 45.93x, which is 3.25% lower than its 5-year historical average, suggesting that peak valuation concerns can be set aside [5]. - The dividend yield of 0.68% is below the IT sector's average of 1.4% and the stock's own 5-year average of 2.05% [5]. - Compared to peers, Broadcom's forward P/E is higher than Nvidia's 40.45x, but this does not indicate significant overvaluation [6].