Why Marvell Technology Group Ltd. Shares Could Pop 30%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Marvell Technology Group  (NASDAQ: MRVL  ) gained 2% this morning after Nomura Securities upgraded the chipmaker from neutral to buy.

So what: Along with the upgrade, analyst Sanjay Chaurasia planted a price target of $19 on the stock, representing about 28% worth of upside to yesterday's close. So while momentum traders might be turned off by Marvell's recent price weakness, Chaurasia's call could reflect a sense on Wall Street that the company's market share growth prospects are becoming too cheap to pass up.

Now what: According to Nomura, Marvell's risk/reward trade-off is rather attractive at this point. "We believe the company is ahead of MediaTek in its LTE learning curve," said Chaurasia. "In addition, we believe Marvell is gaining share at Samsung and should disproportionately benefit from Broadcom's recent exit from cellular baseband. While most investors view Marvell's LTE traction as short-lived and expect it to be a repeat of the TDSCDMA story once MediaTek launches its LTE solutions in 2H, we think Marvell's LTE position against MediaTek is stronger than it was with TDSCDMA." More importantly, with Marvell boasting a cash-rich balance sheet and cheapish forward P/E of 12, the downside seems limited enough to bet on that bullishness.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 11, 2014, at 10:43 AM, GaryDMN wrote:

    Marvell's home silicon solutions are the real key. They have been concentrating on the Internet of Things and home media. They make the ChromeCast for Google and should be a big winner with Apple's move into the home and health.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2990378, ~/Articles/ArticleHandler.aspx, 9/2/2015 1:19:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated Moments ago Sponsored by:
DOW 16,247.82 189.47 1.18%
S&P 500 1,931.94 18.09 0.95%
NASD 4,695.66 59.55 1.28%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 1:03 PM
MRVL $10.99 Up +0.10 +0.92%
Marvell Technology… CAPS Rating: ****