(This is an excerpt from an article I originally published on Seeking Alpha on December 19, 2012. Click here to read the entire piece.)
For over two years, Marvell Technology Group Ltd (MRVL) has repurchased a LOT of shares.
{snip}
Indeed, even after spending $2.1B repurchasing shares, MRVL still has $2B sitting on the balance sheet in the form of cash, cash equivalents, and short-term investments. Cash flow generation is strong. Yet, despite the company’s continued generosity toward shareholders, the stock has been trading at early 2009 levels for over the past two months. {snip} Even shorts are unimpressed. {snip}
Source: NASDAQ.com short interest
So a natural question might be to ponder whether MRVL is just a value trap, like Hewlett Packard (HPQ). {snip}
Finally, the stock chart in MRVL is showing some encouraging signs for the first time in a long time. {snip}
As always, time will soon tell. But for now, MRVL looks like a good risk/reward play at current levels.
This monthly chart is a cautionary reminder of the longer-term challenges MRVL has faced with a business so heavily reliant on PCs:
Source for charts: FreeStockCharts.com
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on December 19, 2012. Click here to read the entire piece.)
Full disclosure: long MRVL