Broadcom Corporation (BRCM) provides semiconductor solutions for wired and wireless communications.
Insider selling during the last 30 days
Here is a table of Broadcom's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Option Exercise & Sale||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Rajiv Ramaswami||EVP||June 6||57,058||Yes & No||Yes||364,414
shares + 91,666 options
|Daniel Marotta||EVP||June 6||32,576||Yes & No||Yes||403,160 shares + 170,833 options||5.4%|
|Scott McGregor||CEO||June 2-9||200,000||Yes||Yes||1,761,547
shares + 2,342,123 options
|Henry Samueli||Chairman||June 2||50,000||No||Yes||24,059,635 shares||0.2%|
|Terri Timberman||EVP||June 2-3||85,000||Yes||Yes||254,060
|Robert Rango||EVP||June 2||28,122||Yes||Yes||416,774 shares + 370,845 options||3.4%|
|John Major||Director||June 2||1,000||No||Yes||43,925
shares + 31,250 options
There have been 453,756 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of Broadcom's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 2,396,992 shares sold and there have been zero shares purchased by insiders since January 2013. The month of June has seen the most insider selling this year.
Broadcom reported the first-quarter financial results on April 24 with the following highlights:
|Net income||$165 million|
The seven insiders sold their shares after this report.
Broadcom has negative revenue growth currently.
On June 2, Broadcom announced that it is exploring strategic alternatives for its cellular baseband business, including a potential sale or wind-down. Broadcom's stock surged $6 after this news and the seven insiders sold their shares after the surge.
Broadcom's second-quarter guidance is as follows:
|GAAP product gross margin||up ~200 basis points|
(Source: Earnings presentation)
On June 2, Broadcom updated its outlook and now expects both GAAP and non-GAAP product gross margin to be at or above the high end of the range shown in the slide.
|Qtrly Rev Growth (yoy):||-0.01||0.02||0.04|
|PEG (5 yr expected):||1.67||1.99||1.02|
Broadcom has the weakest revenue growth among these three companies.
Here is a table of these competitors' insider activities during the last 30 days.
|Company||Insider buying / shares||Insider selling / shares|
Qualcomm has also seen intensive insider selling during the last 30 days.
There have been seven different insiders selling Broadcom, and there have not been any insiders buying Broadcom during the last 30 days. Two of these seven insiders decreased their holdings by more than 10%. Broadcom has an insider ownership of 0.28%.
Before going short Broadcom, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are negative revenue growth, and the intensive insider selling activity.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.