Written by: Aaron Katsman | February 25, 2008
Aaron Katsman
www.IsraelNewsletter.com
Shares of Marvell Technology (MRVL) are trading higher as a story in Barron’s says that shares could double in two years as the company’s chips find their way into new products and help boost profits. Barron’s thinks that a potential catalyst for the stock will be as Research in Motion (RIMM) launches 3G BlackBerry handsets using Marvell chips.
Marvell, a fallen tech-darling, has dropped over 60% since early ‘06. Beset by problems from the options backdating scandal and falling margins, investors have totally lost confidence in the name. More than once over the last 12 months we have heard that the stock is a great buy, only to watch it fall more.
While some investors will cry that now that Barron’s wrote about them the stock is doomed, the potential for the stock to recover is very real. Improving margins, the aforementioned launch of the 3G Blackberry, new products and cost cutting all could possibly help the stock get back on track.
Some buy-side investors are betting that Marvell can earn $1.00 to $1.50 if it executes well in the fiscal year ended January 2010 (again, not counting options). Sangeeth Peruri, of J&W Seligman, thinks such earnings would return the forward-earnings multiple on the stock from today’s 16 times earnings back to the level of over 20 times that Marvell enjoyed in years past. If so, Marvell’s shares could more than double from 11 today.
“Revenues are growing, driven by a lot of product cycles,” says Peruri. “You could get 30-50% annual earnings growth for the next three-to-five years.”
Disclosure: Author’s fund holds a position in MRVL. He has no position in any other stock mentioned as of 2/25/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
Written by: Zack Miller | February 24, 2008
Stock of the Month: ZRAN
Zoran (Nasdaq: ZRAN), was January’s Stock of the Month as part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com
Background
Zoran develops and markets integrated circuits (ICs) that provide digital signal processing (DSP) capabilities to a variety of consumer electronic products. These products are used in DVD players, home theatre systems, and digital cameras. The company also develops products for digital video delivery via set-top box or television. The company sells through Original Equipment Manufacturers (OEM) who package them into digital and audio products sold to consumers.
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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.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
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
Written by: Zack Miller | November 22, 2007
Globes reports today that Marvel Technology Group (Nasdaq: MRVL) is set to embark on a restructuring plan that would include paring back Israeli staff, numbered at 1200, by about 150-200 employees.
Legendary hedge fund investor, George Soros, recently added to his position in the chip maker.
