AVGO has historically underperformed during the month of April
It's been a volatile time for the semiconductor sector recently, with global chip shortages weighing heavily on the space. While some big names are looking toward solutions, the shortage sent many reeling last month as many sector members stepped into the earnings confessional. One such name was Broadcom Inc (NASDAQ:AVGO). The equity suffered a selloff in early March, which only seemed to deepen following a tepidly received earnings report.
While AVGO's March dip culminated in a sharp ricochet off the 100-day moving average, it appears most of these gains have consolidated just below the $490 level -- home to the equity's Feb. 19 all-time closing high. Today, the chip stock is distancing itself even further from this level, down 0.1% to trade at $487.93. And if investors need more of a reason to put the breaks on AVGO, April has been a historically bearish month for the stock, performance wise.
In fact, the equity just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of the 25 stocks with the worst returns in April. According to this data, AVGO has ended the month lower six times over the past 10 years, averaging a drop of 1.1%. A similar move would put the equity right near the $482 mark -- even further away from its recent consolidation level.
A round of bear notes from the brokerage bunch could send AVGO lower, too. The security's 12-month consensus price target of $510.96 sits at an untouched region and represents a 4.7% premium to current levels. Plus, 18 of the 21 analysts in coverage carry "buy" or better ratings, while just three say "hold."
For those still looking to play AVGO's next move, though, options look like the way to go. The equity's Schaeffer's Volatility Index (SVI) of 27% stands higher than only 6% of readings from the past 12 months, implying option players have rarely priced in lower volatility expectations.