Merrill gets contrarian on Marvell (MRVL)
Written by: Zack Miller | December 4, 2007
Merrill Lynch published a research report yesterday on Marvell Technology Group (Nasdaq: MRVL) as part of a “What the heck do investors do in 2008″ piece.
In a relatively bold move, Merrill gets contrarian on this call as sentiment on Marvell has soured since they reported earnings last week. Merrill thinks that 2008 is a pivotal year and investors need to tread carefully as they choose which subsector of technology to plow their money into.
The bank recommends buying Marvell with a $20 price target based on “solid topline growth, gross margin expansion, and better opex discipline.”
We wrote recently about cost cutting measures the company was taking in the wake of disappointing, though not disastrous, earnings.
Israel Opportunity Investor editor, Aaron Katsman, believes that this may be a good time for an entry into the stock as well. He wrote recently, “Keep in mind the relationship with Apple(AAPL). Marvell is currently supplying the WiFi chip in the iPhone, and many analysts are predicting that it will grow the Apple relationship, especially for the next-generation video iPod player.”
It’s definitely a stock with hair on it. But after taking a recent haircut, it may be an interesting, albeit drawn-out, play.
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Disclosure: Author’s fund has a position in MRVL. He holds no position in any other stock mentioned, as of 12/04/07.
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Zack Miller is the Managing Editor of the Israel Opportunity Investor newsletter and a former equity analyst for a leading multinational hedge fund. For more information, go to www.israelnewsletter.com, call 1-888-327-6179, or email zack@israelnewsletter.com
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