Standpoint Research Downgrades Marvell Technology Group

Ronnie Moas of Standpoint Research downgraded Marvell Technology Group Ltd. MRVL from Buy to Hold Friday.


“The shares jumped by 6 percent yesterday and 25,000,000 shares traded -- that was five times the average daily volume. The market cap is now $8.2 billion. There is $2.4 billion in cash on the balance sheet with zero debt, but it is important to note that two-thirds of the cash will/could be wiped out on the verdict (and failed appeal),” explained Moas.

“The shares rallied 12 percent in the last three days and are near fair value at 14X what I think they could earn next year – with the lower share count factored into the equation,” according to Moas.


The analyst noted added that there “is speculation that MRVL may sell their mobile chip unit to China Electronics and there was recently heavy buying in the January $14.5 MRVL call options.”

“My style is to sell into situations like this and very rarely does it backfire,” Moas concluded.

Marvell Technology recently traded at $15.97, down 0.28 percent.