For everything (turn, turn, turn) there is a season. There's no reason for Netflix (Nasdaq: NFLX) to spend its hard-earned and incredibly useful cash on share buybacks, and I'm not afraid of telling 'em. But it's a whole different ball of wax for chip designer Marvell Technology (Nasdaq: MRVL), and this buyback has my wholehearted support.

As part of last night's second-quarter report, Marvell announced a $500 million share repurchase program. The stock is trading at a 35% discount to 52-week highs, and you can get a share for a low, low 12.5 times trailing earnings. That's after the 11% overnight jump. I love Netflix, but that stock is fully valued today; Marvell has return-on-investment reasons to start a buyback.

In the words of Chief Financial Officer Clyde Hosein: "In our financial model, we believe that the current stock price is not reflective of what the business model is, and we intend to be active purchasers around this range." I love it when management comments make sense.

That overnight jump is also qualified by excellent results. Slow sales in the hard drive controller division were more than made up for by brisk business in the wireless and wired networking segments. Overall, sales increased by 40% year over year to $896 million and non-GAAP earnings more than doubled to $0.40 per diluted share. Free cash flow increased by 23% compared with the first quarter and 67% year over year, and more than 32% of Marvell's revenue turns into beautiful, shareholder-friendly free cash.

As impressive as these numbers are, there's still room for improvement. I'll remind you that semiconductor sector peer Analog Devices (NYSE: ADI) grew sales by 46% year over year while head-to-head competitor Atheros Communications (Nasdaq: ATHR) reported revenue gains of 112%. Marvell's bread-and-butter division is still the hard drive controller segment, which was hurt by nervous drive builders overstocking on components in the first half of the year, just in case they'd need it later. Western Digital (NYSE: WDC) and Toshiba contributed for nearly 40% of the company's revenue last fiscal year, so when they curtail orders, that's a major anchor on Marvell's results.

If everything is back to normal now, Marvell should keep growing apace with the rest of the industry, if not faster. Wireless communications and high-capacity storage are still Pavlovian drool words in this market, and management alluded to a number of mysterious, unnamed products due to hit retail shelves with new Marvell chips inside.

I see every reason to applaud Marvell's buyback, because I agree that the stock is severely undervalued. My CAPS portfolio has a longtime "outperform" rating on this stock, and I think you should follow my All-Star lead.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he does a mean Roger McGuinn on his trusty 12-string. Netflix is a Motley Fool Stock Advisor pick. Atheros Communications is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Atheros. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.