Broadcom announced a 10-for-1 stock split following strong quarterly results, stock trading higher.

From Nasdaq: 2024-06-14 11:55:34

Broadcom Inc. (AVGO) announced a 10-for-1 stock split effective July 15, following stellar quarterly results. AVGO stock trading at $1714, up 12% and 30% higher than the June 3 close. Analysts expect revenue to reach $51 billion, exceeding forecasts. AVGO generated $4.48 billion in free cash flow, indicating strong margins.

AVGO stock was undervalued with a price target of $1980 post-split, based on a 40% free cash flow margin estimate. Revenue expected to rise to nearly $60 billion next year. Selling short out-of-the-money puts could be profitable, especially after the stock split to improve flexibility and yield. AVGO looks cheap despite recent gains.

Selling short OTM puts on AVGO can be lucrative, with easier access post-stock split. For example, the $1670 strike put option expiring July 5 trades at $41.60, offering a 2.49% yield. Post-split, investors will only need $16,700 for one put contract, making it more accessible for short sellers to profit.



Read more at Nasdaq: Broadcom, an AI Chip Stock, Just Split Its Shares Like Nvidia and Looks Cheap