Marvell Technology's
This week, the semiconductor designer reported third-quarter earnings of $0.11 per share on $791 million in sales. That's up from a penny-per-share loss last year, on $758 million of revenue. It also translates into $246 million of free cash flow, a company record that blows the doors off last year's paltry $8 million cash take. Mmmmm, yummy cash.
So business is good at Marvell, despite a challenging macroeconomic environment. That alone should tempt value-minded investors to take a peek, since this stock has suffered more than the overall market this year. But that's not the most exciting investing angle on Marvell today. Let's get back to that new market, and how it could fuel an entire sector for years to come.
Mr. Suthardia likes how notebooks are becoming more portable, while smartphones are getting smarter. Where the twain shall meet, he argues, new opportunities in mobile convergence will arise.
The Apple
It's important to note that Marvell makes essentially every component you'd need for building such a converged mobile computer, including wireless controllers, ultra-mobile CPUs, and GPS products. So if the market goes the way Mr. Suthardia thinks it will, Marvell stands to profit handsomely from that tectonic shift.
A rising tide lifts all boats, though. Maybe you don't like Marvell for some reason (feel free to tell us why not), but Texas Instruments
I was fully prepared to call shenanigans on Mr. Suthardia's optimistic claims, but I can't, and I won't. His conjectures all make sense. A cheap but powerful device that hooks into Web 2.0 and cloud-computing services do nearly every routine task that a regular desktop or laptop can accomplish today. When money is tight, this cheap yet powerful alternative looks like a winner -- and so do the companies that build it.
Further Foolishness:
