Special Situati...'s  Instablog

Special Situations Monitor
Send Message

My company:
  • Marvell Technology Offers Great Value Here 1 comment
    Aug 18, 2012 1:02 PM | about stocks: MRVL

    I just got done reading several sell-side reports post fiscal quarter ended July 2012 and they all seem to have a common theme, which is:

    The Company generates very healthy cash flow ($500-$700 million per year), net cash on the balance sheet (~$2 billion) represents a third of its market cap and signifiant stock buybacks will add value when the business recovers BUT don't buy MRVL because it

    Lacks Near-term Catalyst.

    Those words are music to the ears of a value investor.

    Some reports even had an angry tone - why didn't the Company pre-announce the miss? This typically happens when analysts are left a bit in the dark and feel embarrassed in front of their clients for not having given them proper warning to get out of the way before a miss.

    Having been a former sell-side analyst myself, I chuckle at these because...well, I have been there. The question you have to ask yourself is this - What does that have anything to do with value?

    Can this stock go lower? Of course it can. Most likely things will get worse before they get better but if you think like a business owner as opposed to a stock owner, Marvell's cash and free cash flow should provide you with some assurance that its business will remain intact through the downturn. It should not get distressed to the point where investors suffer a permanent loss of capital.

    Whenever the cycle turns in Marvell's favor (and it likely will, that is why its called a Cycle) the appreciation in its enterprise value very likely will more than make up for the pain that investors are going through presently.

    Disclosure: I am long MRVL.

    Stocks: MRVL
Back To Special Situations Monitor's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Maria Auziliadora
    , contributor
    Comments (655) | Send Message
    Long MRVL!!!
    18 Aug 2012, 07:57 PM Reply Like
Full index of posts »
Latest Followers


  • http://tinyurl.com/gqquw2v
    Jun 17, 2016
  • $OCN: Today's press release alludes to (1) liquidity issues, (2) distress and (3) potential acctg restatements down the road..
    Mar 2, 2015
  • Do you know how many RMBS are tied with $OCN?Hundreds. Imagine if just a few more switch.That is the issue, not the 0.07% blah blah blah.
    Feb 28, 2015
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.