Ashraf Eassa
Long/short equity, contrarian, independent research, tech

Cavium Networks: A High Growth Networking Play With The Best ARM Server Play Built-In

Cavium Networks (NASDAQ:CAVM) is a developer of specialty, high performance semiconductor products for networking applications. While the company's shares are down meaningfully from their recent highs due largely to Cisco's (NASDAQ:CSCO) recent weakness (Cisco is Cavium's largest customer), I believe that this weakness represents a compelling buying opportunity for growth-oriented tech investors.

Thesis

    Cavium's core specialty network processor business is growing, benefitting from both secular trends as well as share gains There is solid operating leverage in the business model, and management has been able to grow revenues at a rate meaningfully higher than opex While core networking chip business is attractive (and could in itself support a meaningfully higher share price), success in the emerging ...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
WITH SEEKING ALPHA PRO, INVESTORS CAN ALSO:
  • Access Top Ideas, chosen by Seeking Alpha’s editors
  • Filter long and short ideas by market cap and sector
  • Get Coverage of over 5,000 stocks, many of which have little or no coverage elsewhere
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO." Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else." Patrick Rice, Mainstay Capital Management
100% Satisfaction Guaranteed
Money back guarantee. Seeking Alpha PRO members receive a no-questions-asked refund for membership on months paid and not used. Details