Marvell Technology Inc (MRVL)

[SyndicateTwo]

Hey Sun, I'm now heavy into BRCM having given up on MRVL. You might want to come over to my other board talking about the SPX an BRCM. (http://investorshub.advfn.com/boards/board.aspx?board_id=13193) The entire two or so years where we were all here talking about MRVL hoping for it to make the expected magical move, I kept watching BRCM rally big while MRVL would not do much. Why? Because BRCM is a very diversified and VERY profitable company. That's why it gets the 1st tier money when the SOX runs every couple of quarters.

Look at this chart of BRCM and you see the retracement falls right at about $25 which is the magic level where most of the volume during the last year has been. So, you'll see that for sure I think before year end and with the $SOX chart and BRCM chart on a WEEKLY looking like near perfect reversals with both showing monster hammers, I think the odds are great for a nice run beginning now. I do expect a small pullback probably to $20 on BRCM being that it just ran from $18.50 to $22.50 in 2 days. But just look at the Jan 2010 $10 calls at about $13.40. That's a basis of $23.40! That means you get a stock that could very well run to $25 at least and most likely higher within the next 2 months for only $1340 controlling $2200 worth of stock. A $10k investment could turn into at least $12,600 I presume, or a 25+% profit in less than 2 months.






But what's really nice is this MONTHLY chart of the $SPX -- WOW! Look at that hammer on the MONTHLY! You rarely get that!







So, it all looks very good for a nice reversal overall right here. There is a 40 week cycle low coming on Oct 22nd. But cycles don't always come in on time and with the unique things that have happened I would assume that that cycle might have been shifted early. Sep 19th, yesterday, was a short term cycle low. To put it into perspective, March 23rd was the 20 week cycle low and look what happened that week.

So, BRCM is a $30 stock. Why? Because, well, look at this chart---





You see, the problem with MRVL is that they still are a one trick pony. Storage is their core biz. It's strong and now finally they are free cash flow positive. But it's like SIGM in that any large customer walks and it's toast for their profit. BRCM is the place to be because it's so diversified and not owned by one large holder like the Sutardja's and MRVL. That means the big money investors don't worry about it like they do with MRVL. The Sutardja's get a whim up their rear and they have the power to do major damage to large investor's investment if they make a big mistake. BRCM is a bigger company that's run like a normal public company, not to mention they are going to probably do over a $1 bill in free cash flow next year putting the stock price today at $21.50 only 20X free cash flow which is unheard of for a 40% growth stock with nearly $2b in cash and no debt.