{"id":31683,"date":"2012-08-16T16:54:42","date_gmt":"2012-08-16T20:54:42","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/08\/marvell-technology-mrvl-and-the-next-generation-of-wi-fi\/"},"modified":"2012-08-17T06:09:40","modified_gmt":"2012-08-17T10:09:40","slug":"marvell-technology-mrvl-and-the-next-generation-of-wi-fi","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/08\/16\/marvell-technology-mrvl-and-the-next-generation-of-wi-fi\/","title":{"rendered":"Marvell Technology (MRVL) and the Next Generation of Wi-Fi"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

Nowadays, many of us have internet-connected devices in almost every room. Sometimes more than one.<\/p>\n

At any given moment mom, dad and the kids may be streaming movies through game consoles, shopping on Amazon<\/strong> (Nasdaq: AMZN) on their smart phones and reading the latest stock market moves on their tablets, all at the same time<\/em>.<\/p>\n

This stresses our current wireless network systems, and many aren\u2019t producing fast enough speeds for our growing electronic demand.<\/p>\n

But have no fear\u2026<\/p>\n

Starting next year, wireless networks will have a new standard called 802.11ad that will support a 60 GHz band. This will allow wireless networks to run a great deal faster than those that run on today\u2019s 2.4 GHz and 5 GHz bands.<\/p>\n

To draw comparisons, today\u2019s 5 GHz Wi-Fi can work as fast as 600 megabits per second, while the new standard will support speeds up to 7 gigabits<\/span><\/em> per second.<\/p>\n

However, this new, faster band standard doesn\u2019t mean jack if you don\u2019t have products to support it.<\/p>\n

\u201cPeanut Butter and Jelly\u201d<\/strong><\/h2>\n

That\u2019s where Marvell Technology<\/strong> (Nasdaq: MRVL) and its recent partnership with Israeli-based start-up Wilocity come into play.<\/p>\n

Their partnership makes as much sense as peanut butter and jelly. Wilocity is the leading developer of 60 GHz multi-gigabit wireless chipsets. And Marvell produces market-leading Avastar devices; these are the physical routers we see in many homes and offices today.<\/p>\n

Together they\u2019ll create tri-brand solutions enabled with the new 802.11ad standard. And they\u2019re among four other companies currently in the process of bringing these products to market.<\/p>\n

These new Wi-Fi routers will create a platform where multiple devices can stream live content at the same time, with extremely faster speeds and fewer glitches.<\/p>\n

Since it takes a year on average for Silicon Valley to get new products into motion, we\u2019re looking for new Wi-Fi routers to hit the shelves around 2014. And when they do, expect Marvell\u2019s bottom line to get a big boost.<\/p>\n

But let\u2019s take a look at things right now\u2026<\/p>\n

Priced to Sell<\/h2>\n

When you break down some of Marvell\u2019s financials, there are a few statistics that scream \u201cbargain.\u201d<\/p>\n

Marvell\u2019s most recent quarterly earnings and revenue growth are nothing to smile about, considering both were negative. And the stock has taken a considerable fall of 36% this year since its high of $18.86 back on February 3. Today it\u2019s trading in the $12 range.<\/p>\n

\"Marvell<\/p>\n

But when you look at the fact that they have zero debt, trade at a P\/E of 12.69 (well below the industry average of 33.11) and sport healthy profit margins of 16.62% (almost 5% higher than the industry average), the picture starts to brighten.<\/p>\n

Marvell\u2019s P\/E is very attractive, but the ratio only values their underlying equity. It\u2019s also nice to know the company has one of the industry\u2019s lowest EV\/EBITDA ratios.<\/p>\n

EV\/EBITDA stands for \u201cEnterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization,\u201d and it\u2019s a measure merger analysts often use to value a firm since it also accounts for debt and cash holdings in a company\u2019s valuation.<\/p>\n

Marvell\u2019s EV\/EBITDA is an attractive 6.49 \u2013 almost half the industry average of 12.<\/p>\n

And this is no surprise, considering Marvell has over $2 billion in cash sitting on its balance sheet and no debt.<\/p>\n

Essentially a low EV\/EBITDA means the company is at an attractive takeover price. Since Marvell is valued around $7 billion, we don\u2019t expect the company to be taken over soon \u2013 there are only so many companies that could afford such an expenditure. However, a bargain is a bargain, and investors should take note.<\/p>\n

Oh, and did we mention famed hedge fund manager David Einhorn is bullish on Marvell? According to its latest 13-F filing, Einhorn\u2019s fund \u2013 Greenlight Capital \u2013 has 2.87% ownership of the company. And Marvell is one of the fund\u2019s top five holdings, representing more than 5% of the fund as of March 31.<\/p>\n

So with all the metrics covered, Marvell\u2019s value ratios appear to be emphasizing that the company is currently sitting on the bargain rack. And with new cutting edge Wi-Fi routers in the works to hit shelves in 2014, future sales look bright, too.<\/p>\n

Good Investing,<\/p>\n

Ryan Fitzwater<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U Nowadays, many of us have internet-connected devices in almost every room. Sometimes more than one. At any given moment mom, dad and the kids may be streaming movies through game consoles, shopping on Amazon (Nasdaq: AMZN) on their smart phones and reading the latest stock market moves on their tablets, all … <\/p>\n

Continue reading “Marvell Technology (MRVL) and the Next Generation of Wi-Fi”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31683","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31683"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31683\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}