Some Broadcom Inc. (NASDAQ:AVGO) shareholders may be a little concerned to see that the Chief Legal & Corporate Affairs Officer, Mark Brazeal, recently sold a substantial US$9.7m worth of stock at a price of US$387 per share. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.

Broadcom Insider Transactions Over The Last Year

The President, Hock Tan, made the biggest insider sale in the last 12 months. That single transaction was for US$50m worth of shares at a price of US$337 each. That means that even when the share price was below the current price of US$369, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 10% of Hock Tan's holding.

All up, insiders sold more shares in Broadcom than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does Broadcom Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Broadcom insiders own 1.1% of the company, currently worth about US$20b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Broadcom Tell Us?

The stark truth for Broadcom is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Broadcom makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.