Marvell Technology Group Ltd. (MRVL): Billionaire David Einhorn Trimming Position

The shares are up in 2013 and the company is making progress on other fronts. Marvell Technology Group Ltd. (NASDAQ:MRVL)reported fiscal 4Q13 earnings ahead of expectations. FY14 guidance was in line with consensus forecasts. Marvell has the opportunity on several product fronts in 2014 to generate growth. First it is positioned to gain share in hard disk drives (HDD) and solid-state drives (SSD) controllers. Their new connectivity solutions are being adopted and it is moving forward with their dual and quad core unified communications system. Analysts that support owning the shares believe the Street’s forecast in these three areas are too conservative. In addition, Marvell returns cash to shareholders via dividends, current yield of 2.3%, and repurchases. For other examples of companies returning cash to shareholders via dividends and repurchases, click here.

Micron Technology, Inc. (NASDAQ:MU) Results Positive for Marvell

Micron Technology, Inc. (NASDAQ:MU) is worth watching for holders of Marvell, as they are the main supplier of SSD controllers to Micron Technology, Inc. (NASDAQ:MU). Micron has lost over $1 billion in the last year which is especially large for a company under $10 billion in market cap. However there is positive news; Micron reported quarter ending shipment (February 2013) that noted SSD revenues were up by 40% over the prior quarter. It expects double digit growth in 3Q13.

Challenges for Marvell

Marvell does face challenges to penetrate its new markets and gain share from the current players like LSI Corp (NASDAQ:LSI) and Intel Corporation (NASDAQ:INTC). Also, in cellular communications processors, Research In Motion Ltd (NASDAQ:BBRY) accounted for a majority of the business. BlackBerry is currently trying to stop its share loss with the introduction of the BlackBerry 10 operating system. It is currently fighting for third place in this market. If Marvell wants to succeed in this area, it needs some key wins from other players in this market.

Conclusion

The sale of Marvell’s stock by Greenlight is likely some profit taking. Over the coming months, Einhorn may continue to reduce shares behind the recent gains in the stock. That said, the growth opportunities still exist for Marvell and for investors that believe it will beat forecasts; the stock may be worth holding.

The article Einhorn Reducing Position in Marvell originally appeared on Fool.com and is written by Mike Thiessen.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.