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.

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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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Aaron Katsman
IsraelNewsletter.com

Zoran (ZRAN), a developer and marketer of integrated circuit cores (ICs) and embedded software for DVDs, digital cameras, and set-top boxes, announced that US Securities and Exchange Commission (SEC) has notified the company by letter dated November 2, 2007, that the staff’s investigation of Zoran’s historical stock option granting practices has been terminated and that no enforcement action against Zoran has been recommended to the Commission. Zoran’s NASDAQ listing was in jeopardy, as they delayed publishing their financial reports while the SEC investigation was on-going.

This should help lift a cloud that was hanging over the company and allow them to focus solely on executing their business model.

My man, Zack “FACEBOOK” Miller had a great piece on Zoran, and he is really getting jiggy.

Take a good look at Zoran, as they continue to be an attractive long-term play.

Please see our Disclaimer HERE.

Disclosure: Author has a position in ZRAN as of 11/9/07.

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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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