|Forbes.com, Winter, 2012. This article was placed on behalf of the U.S. based equity research effort of institutional broker and investment bank Canaccord Genuity. It was part of a series of articles developed under an agreement with forbes.com to work with a variety of contributors and assist them in delivering actionable investment ideas each week. The site, forbes.com is one of the top 500 sites in the world with nearly 10 million subscribers and approximately 100 million page views a month.|
Canaccord Genuity technology analyst Bobby Burleson initiated research coverage on Marvell Technology Group (MRVL) with a BUY rating and $20 price target. Mr. Burleson said:
“We expect revenue and earnings growth to outstrip the broader semiconductor market in 2012, based on a recovery for the company’s core HDD [hard disk drive] business, rising demand for TD-SCDMA smartphones, and a shift to merchant SSD [solid state drive] controllers that should favor MRVL’s technology leadership.”
Expanding on each point, he added the following:
Core market positives – Anticipate HDD shifts from headwind to tailwind in F2013, with faster-than-expected adoption of 500G drives due to component shortages (MRVL with 100% share).
Mobile and Wireless inflection – Marvell should benefit from TD-SCDMA smartphone growth (70% share) and non-TD-SCDMA Android smartphone growth in emerging markets. Marvell has first mover advantage in the TD-SCDMA smartphone market.
Play on SSD – SSD controllers are transitioning from captive to merchant solutions as performance needs grow with increasing read/write cycles. Marvell should be well positioned to benefit from this shift to merchant SSD controllers.