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There's a lot of overlap between Seagate and
Marvell Technology Group(MRVL - Get Report), another position that Greenlight added onto in the last quarter. Marvell designs chips used in data storage, networking, and personal electronics, but its bread and butter is supplying control chips to hard drive manufacturers.
Even though Marvell has gotten sold off this year alongside the rest of the semiconductor industry, it shouldn't have been. Here's why.
Unlike most semiconductor firms, Marvell has exposure to two of the most attractive spaces in the tech sector right now: computer storage and mobile handsets. Because Marvell provides chips for both of those high-volume-growth niches, the firm stands to see its top and bottom lines expand together as it ships more chips and flattens down the large fixed costs it runs from developing those chips. More units shipped means that each chip carries a lower portion of those fixed costs, after all.
>>10 Top-Rated Tech Stocks That Pay Big Dividends
Einhorn and company added close to one million shares of MRVL to Greenlight's portfolio in the last quarter, ratcheting the stock's concentration to more than 5% of the hedge fund's total holdings. At present, Greenlight holds around $290 million worth of Marvell stock.
As of the most recently reported period, Marvell was also one of
David Tepper's Appaloosa Management holdings and showed up in
Daniel Loeb's Third Point portfolio.