Several Hedge Funds Increase Their Bets On Marvell Technology

Feb.27.12 | About: Marvell Technology (MRVL)

Marvell Technology (NASDAQ:MRVL) is a semiconductor company that is the leading supplier of chips in handheld devices. Earlier this year the company cut its sales outlook for the fiscal Q4 (ending Jan. 2012) citing not only the floods in Thailand which caused huge disruptions by affecting shipments of the company's disk-drive controller chips, but also weakness in the Chinese cell phone market.

That said, the market didn't punish the stock nearly as much as it could have and MRVL's report that Q4 earnings and revenue fell less than expected led the stock (which was a hedge fund favorite in Q4) to rally:

From Reuter's:

"Marvell Technology Group Ltd's fourth-quarter earnings and revenue fell less than Wall Street expected, and the company said revenue for the current quarter could rise as much as six percent sequentially, as the chipmaker recovers from hard-drive shortages and its weak Chinese business."

A number of hedge funds held this stock as of Q4 2011 but the 3 top HF holders of this stock are also the ones that have been increasing their bets recently:

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This was a popular Hedge Fund stock a few quarters back but has since lost favor with the HF crowd. That said, the filers above have been doing pretty well so far in 2012 on this bet:

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Interestingly, Whitman Capital's founder was accused of trading MRVL on insider tips received from Galleon co-founder Raj Rajaratnam.

As smartphone use in China - for which MRVL supplies many of the chips - accelerates, it should be offer shares a boost in the near term. Several hedge funds appear to be making that exact bet.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.