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MARKETS: YF Premium Investment Idea: Marvell Technology Group (MRVL)

Yahoo Finance's Jared Blikre breaks down some of the features of the Yahoo Finance Premium package. Not a subscriber? Start your free trial to join future webinars live!

Video Transcript

JULIE HYMAN: Then, Jared, yesterday we saw call option buying once again driving up FANG stocks in particular, or FAANG stocks, depending on which configuration you're looking at. Apple and Amazon in particular. We have seen this kind of activity before. What causes it? Presumably, it's the events today. And what does it mean for these stocks?

JARED BLIKRE: Yeah, it's pretty interesting. We also saw the VIX rising yesterday as stocks of major indices rose. And a lot of this is having to do with these options trades. And not only Robin Hoods, but some of the big whales in the market. So yesterday, and it was admittedly, a bond holiday, there were bullish Apple calls.

But Apple strikes alone accounted for four of 10 most traded options contracts. And this creates a virtuous cycle that we have into options expiration, which is Friday, where the dealers who write these options, sell them, have to cover them by buying the stock. I think that's what we saw yesterday and we could see it into the end of the week. So we'll have to be on the lookout for that.

Now I want to do a hard pivot to Yahoo Premium, because we do have a call by Argus Research, bullish call on Marvell Technology. And this is a stock that is up 66% year to date. And some of the things that Argus is pointing out here that they like in the stock, number one, they have a long-term target of, excuse me, of $50.

And they're also saying that Marvell is showing accelerating momentum in the 5G, cloud and automotive end markets, with its networking, connectivity and storage products. They're also saying that our analysis suggests that Marvell is undervalued, based on the company's strong cash flow growth prospects. They're reiterating their buy rating with a 12-month target price of $50, Julie.

JULIE HYMAN: Thanks so much, Jared, appreciate it, and thanks for hanging with me for the past hour.