At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we track the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
The sugar-high from Halloween candy hasn't even had time to exit our systems, and already it's beginning to feel a lot like Christmas for semiconductor investors. Yesterday, we told you how Down Under analyst Macquarie upgraded shares of Intel (Nasdaq: INTC) and Advanced Micro Devices (NYSE: AMD). This morning, it's more of a down-home analyst doing the picking -- but these guys like semis, too.

On Tuesday, Susquehanna Securities upped its rating on Marvell Technology (Nasdaq: MRVL) to "positive," lifting its target price on the shares more than 50% to $25 apiece. Says Susquehanna: "the risk/reward for the stock has improved," "large near-term estimate cuts" are unlikely, and in fact, "product cycles ahead for 2011" will drive earnings in the New Year.

So while Susque sees Marvell earning $0.42 per share in the upcoming Nov. 15 earnings report, followed by $0.40 in Q4 (a total of $0.04 lower than its previous H2 estimates), the analyst believes Marvell will make all that back and more in the new fiscal year. Fiscal 2012 earnings: $1.81 per share. If the analyst is right, this means Marvell shares now sell for just 13.7 times this year's earnings, and 11 times next year's, after sprinting ahead 25% -- and thinks these prices are just ... wonderful. I agree -- and in fact, I think the truth is even better than the picture Susquehanna paints.

Let's go to the tape
There are, however, risks to this call. First and foremost -- Susquehanna itself, because historically Susquehanna has done a poor job of picking winners and losers in the semis space, getting about two picks wrong for every one it gets right:



Susquehanna Said

CAPS Says (out of 5)

Susquehanna's Picks Beating (Lagging) S&P by

Varian Semi (Nasdaq: VSEA) Outperform *** 24 points
Actions Semiconductor Outperform ***** (31 points)
Entegris (Nasdaq: ENTG) Outperform *** (32 points)

So ... wrong about Actions, wrong about Entegris -- why should an investor have any faith in Susquehanna's prediction that Marvell will outperform the market? Simply put: Because at today's prices, it's going to be very hard for Marvell to do anything but beat the market's returns. The stock's just that cheap.

All together now ...
"How cheap is it?" Like I already said, Marvell shares sell for about 14 times Susquehanna's estimate for this year's earnings, and 11 times next year's estimates. They also cost roughly 16.3 times what Marvell has actually earned over the past 12 months.

What really catches my eye, though, is the amount of cash the company is generating. Over the past year, Marvell's free cash flow has approached $1 billion -- nearly 19% ahead of the company's reported GAAP "profits." Subtract the company's $2.4 billion in net cash, therefore, and what we're looking at here is a projected 16% grower, whose enterprise is valued at only 10.3 times the amount of cash it generates in a year. To me, that sounds awfully attractive, but it's not the only reason I like the stock.

A few days ago, I pointed out to you the incredible lack of respect that Research In Motion (Nasdaq: RIMM) is getting these days, as Apple's (Nasdaq: AAPL) iPads, -Pods, and -Phones steal the imagination of Mr. Market. But it's not just RIM that's suffering. Seems to me, the BlackBerry-phobia is spreading and infecting the stock prices of companies that feed into RIM as well -- companies like Marvell, which as fellow Fool Anders Bylund explained to us earlier this year, makes a lot of the guts of the new BlackBerry PlayBook tablet.

Foolish takeaway
Maybe that helps explain the huge discount to Marvell's historical value. (Susquehanna points out that the company has historically traded for anywhere from "10-30x" forward estimates, and at 11 times today, is pretty much scraping bottom.) Whatever the reason for the cheapness, though, the fact remains: Marvell is marvelously cheap today. And Susquehanna is right to recommend buying it.

Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 578 out of more than 170,000 members. The Motley Fool has a disclosure policy.

Intel is a Motley Fool Inside Value selection. Apple is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Apple, Intel, and Marvell Technology Group.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.