Aaron Katsman
www.IsraelNewsletter.com

Shares in networking chip vendor Marvell Technology (MRVL) are surging on the back of a very strong earnings report. As reported by Tiernan Ray: “sales rose 27% year-over-year to $804 million in its fiscal first quarter ending May 3, beating an average estimate of $784 million. The company’s net income per diluted share of 24 cents, excluding some costs, was almost five times as high as the year-earlier period, and well ahead of estimates of 13 cents per share. Including costs for stock-based-compensation, among other things, profit was 11 cents a share. The company cited stronger than expected sales of “802.11N” wireless router chips, chips for networked disk drives, and printer chips among the sources of higher-than-expected revenue in the quarter. Cost-cutting initiatives helped Marvell boost its gross profit as a percentage of sales to 52%, above the company’s 50% target.”

As colleague Zack Miller posted in December, ” It’s definitely a stock with hair on it. But after taking a recent haircut, it may be an interesting, albeit drawn-out, play.”

How right he was. Giddy Up. It seems that the company’s ambitous turnaround plan has taken hold and we are starting to see the results. Improving margins, the aforementioned launch of the 3G Blackberry, new products and cost cutting all could possibly help the stock get back on track.

As IOI wrote a few months ago, the fact that the former hi-flyer came crahsing down to earth, potentially made for an attractive entry point for the stock. I don’t want to toot our own horn, but with Miller’s Decemeber call and our February post, it’s nice to be right once in a while!

If you are a long-term investor, looking to find a battered tech name that has the potential to make a turnaround, do some research on Marvell.

Disclosure: Author’s fund holds a position in MRVL. He has no position in any other stock mentioned as of 5/30/08.

Please see our Disclaimer HERE.

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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.

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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

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Aaron Katsman
www.IsraelNewsletter.com

With today’s news that Marvell Technology(MRVL)  is planning to fire 100 Israeli workers, as part of a global cost-cutting plan, it appears that this hi tech firm is going to be the Grinch that steals Hanukkah.

Marvell designs chips used in hard-disk drives, mobile phones, Wi-Fi functional electronics and Internet networking gear. The company has been embroiled in its own options backdating scandal, and has been focused on getting its financial house in order.

Marvellposted a loss of $6.4 million, or a penny a share, on revenue of $758.2 million for the third quarter ended Oct. 27. During the same period a year ago, the chip-maker earned $6 million, or a penny a share, on revenue of $520.4 million.

Notable Calls has an interesting analysis of where they think the stock is going. I think that at these levels, $15 a share, the share makes for an interesting contrarian investment. Marvell is taking steps to improve their margins, and along with the cost-cutting, they appear to be in the process of getting their ship in order. No question it has taken more time the many investors would have hoped for but, while these numbers weren’t of the blowout variety, they weren’t terrible. Keep in mind the relationship with Apple(AAPL). Marvell is currently supplying the Wi-Fi- chip in the iPhone, and many analysts are predicting that it will grow the Apple relationship, especially for the next-generation video iPod player.

This may make for a great turnaround.

Please see our Disclaimer HERE.

Disclosure: Author has a position in MRVL. He holds no position in any other stock mentioned, as of 11/28/07.

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Aaron Katsman is the 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.

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Marvel Technology (Nasdaq: MRVL) getting rocked and hitting a 52 week low after a weak earnings report. The company posted a loss of $ 6.4 million, or -$.01 per share, on revenue of $758.2 million for the third quarter ended Oct. 27. During the same period a year ago, Marvell earned $6 million, or $.01 per share, on revenue of $520.4 million.

Veraz Networks (Nasdaq: VRAZ) closes a deal with ONEMAX for the first-ever deployment of an IMS over WiMAX network in the Americas.

Internet Gold (Nasdaq: IGLD) announces earnings. We also saw the IPO of IGLD’s subsidiary, 012 Smile.Communications (Nasdaq: SMLC) this quarter.

Shamir Optical (Nasdaq: SHMR) reported earnings with an increase of 50% in adjusted net income. Not too shabby.

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