1. The company, at these levels, is a strong buy in the $11-12 range for the following reasons:
2. The company has a strong balance sheet: no debt, and $2.2B in cash, representing 34% of the firm's market capitalization. 3. The price to earnings ratio is 12.33, below the industry median of 15.02. Subtracting out the cash, this ratio shrinks further to 8.02. 4.Hard disk drive makers, Western Digital (WDC) and Seagate (STX) reported excellent quarters with strong revenues. Interestingly enough, one of the largest long term concerns surrounding Marvell is the hard disk drive exposure, but given that the HDD business is going well, this pressure on the share price seems unjustified. 5. Marvell is a large player in the rapidly growing solid state drive market, with its controllers used in drives from companies such as OCZ Technology Group (OCZ), Plextor, Micron (via Crucial) (MU), and a host of others. So even if worries that hard disk controller sales will be negatively impacted due to solid state drive adoptions are credible, Marvell will very likely benefit either way. 6. The company posted an upside earnings surprise in the two most recent quarters, and despite meeting the mark on the earnings side, concerns over revenue growth going forward weigh the stock down. 7. The company recently instituted a dividend of $0.24/share on an annualized basis, representing a 2.1% yield as of last close. 8.The company has repurchased roughly $1.65B of its common stock since initiating a $2B buyback program in August 2010 with the company recently authorizing an additional $500M. The company can comfortably repurchase these shares without going into debt. 9.Finally, the stock is trading near 52 week lows, and is trading just slightly over its $8.74 book value, giving significant upside potential with limited downside risk. The company reports earnings on August 16, 2012 and has a history of surprising to the upside in earnings per share, which could lead to a strong move to the upside.