Are Broadcom Officials Trading On Insider Information?
Despite an earnings forecast that beat some analysts' estimates and raised the company's shares by more than 7 percent, heavy insider trading has been reported among Broadcom Corporation (NASDAQ:BRCM) executives, suggesting they may know information not revealed in the report.
The company, which manufactures chips for mobile devices, announced its third-quarter sales projections may exceed some analysts' expectations, as demand for smartphones continues to pick up around the world. Broadcom said its third-quarter sales will come in between $2 billion and $2.15 billion.
This topped some analyst estimates of projections for $2.11 billion, according to Bloomberg.
The company's largest customers, Apple and Samsung, have a combined control of more than half the smartphone market, and Broadcom is betting on these companies to continue growing.
"They’ve got the two leading customers and will benefit from any growth," said Betsy Van Hees, an analyst at Wedbush Securities. "They are the safest derivative play to Apple."
But despite the positive sentiment in the earnings projection, Terri Timberman, executive vice president of human resources, sold 500 shares on July 2 at $33.83 each, while Henry Samueli, chief technology officer, sold 150,000 shares at $33.56 each. In the last three months, company insiders have sold $19.38 million in stock.
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