Encompass More Asset Management Cuts Broadcom Stake by 82.3%, Retaining Only $258K Position
Encompass More Asset Management slashed its holdings in Broadcom Inc. by 82.3% in the third quarter, selling 3,633 shares to leave 783 shares valued at $258,000. Broadcom’s institutional ownership remains at 76.43% following mixed trading among other funds this reporting period.
1. Major Stake Reduction by Encompass More Asset Management
In its latest SEC filing, Encompass More Asset Management disclosed an 82.3% reduction in its Broadcom shareholding during Q3, selling 3,633 shares to retain just 783. The remaining stake was valued at approximately $258,000. This move contrasts with other smaller institutional shifts: Sawyer & Company increased its position by 62.1% to 94 shares, while Longfellow, Legend Financial Advisors, Teachers Insurance & Annuity Association and LGT Financial Advisors collectively initiated new stakes valued between $27,000 and $31,000 each. Overall, institutional investors hold 76.43% of Broadcom’s outstanding shares.
2. Robust Q4 Earnings and Dividend Hike
Broadcom reported Q4 revenue of $18.02 billion, a 28.2% year-over-year increase, beating consensus by $560 million. GAAP EPS of $1.95 topped estimates by $0.08, lifting net margin to 36.2% and return on equity to 37.45%. The company announced a quarterly dividend of $0.65 per share, up from $0.59, representing an annualized payout of $2.60 and a payout ratio of 54.62%. The dividend was paid to shareholders of record December 22, with an ex-dividend date the same day.
3. AI-Driven Growth Accelerates
Broadcom’s AI semiconductor revenue grew 74% in Q4 to $6.5 billion, up from 63% in the prior quarter, driven by custom ASIC orders and data-center networking demand. Management guided Q1 AI revenue to $8.2 billion, implying 100% year-over-year growth. Investors are closely watching the performance of Tomahawk Ethernet switches and Jericho routers, which command roughly 80% market share in high-speed data-center networking, and the roll-out of custom accelerators for major cloud and AI service providers.
4. Analyst Ratings and Insider Transactions
Broadcom holds a consensus “Buy” rating with an average target of $436.33. In December, Barclays raised its target by $50, UBS set a $475 objective, and Oppenheimer and Piper Sandler each lifted theirs by $15 to $25. Weiss Ratings reaffirmed a buy stance. Insider activity included CFO Kirsten Spears selling 3,714 shares and CEO Hock E. Tan selling 130,000 shares in mid-December, reducing their holdings by 1.19% and 17.92% respectively. Over the past 90 days, insiders sold 650,701 shares valued at $239 million.