New Chips Could Double Marvell's Stock - Barron's

Shares of chip-maker Marvell (MRVL) have fallen by two-thirds to a recent $11 amid an options backdating scandal that played with shareholder confidence and decimated its executive staff. Barron's Bill Alpert says Marvell's outlook is pretty darn good: it is working to stop its management gaps, and recently depressed margins are due to rise as its expenses level off.

Marvell's disk-drive chips -- already a mainstay of almost every hard-drive product, and which generate almost half of its revenues -- are about to get a major upgrade called "iterative decoding" that will allow hard-drive makers to exceed the technology's current size limitations. It has also begun producing similar drive enhancers for Blu-ray DVD drives.

Anxiety over rumored snags with mobile chips that promise to 3G-enable BlackBerrys and other smartphones have also pressured share prices; investors will "rejoice" when the new BlackBerrys roll out.

Marvell is working hard to fill its CFO vacancy after the previous CFO resigned amid options backdating issues. It appears co-founder and wife of CEO, Dai Sutardja, a key mover in the company, may strike a deal with regulators that will allow her to return.

Analysts think Marvell's multiple product cycles could see revenue grow 30-50% annually over the next 3-5 years, during which times earnings, and shares, could easily double.

Comments

[tessant:]

when will barrons give SNDK the go ahead? so frusturating....


scott
growthportfolio

2008 Feb 24 03:58 PM

[ben3volent:]

No disclosure?

2008 Feb 25 11:44 AM

[ben3volent:]

No disclosure?

2008 Feb 25 11:44 AM

[Eli Hoffmann:]

"No disclosure?" Hi ben3volent. Because the article is a summary of Barron's opinion, I don't do a disclosure.

However, since you asked: No position.

2008 Feb 25 01:06 PM

[Ken I:]

Marvell also urgently need to stop threatening to sue their own customers over information already in the public domain. Direct copies of Intel data, already published by Intel now carry a Marvell imprint and serial number and customer name with "proprietary information". These are only available with a signed NDA! If somehow the customer's copy leaks out onto the web, Marvell will sue. Brilliant public relations that. Driving their customers to the competition. It seems their legal department is suffering from terminal testosterone poisoning or is exceedingly stupid.. Or both.

Ken.

2008 Feb 25 02:55 PM