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Marvell's a Winter Flop, Summer Flip

Aside from a brutal PC environment, Marvell continues to be hurt by weakness in its mobile and wireless end-markets, which resulted in a 42% and 24% year-over-year revenue drop, respectively. I'm just speculating here, but in my attempts to connect the dots, I can't rule out that Marvell could have been stung by what was a much swifter decline in sales of BlackBerry's (BBRY) older model devices.

Although there is cause for optimism, given the recent launches of BlackBerry's Z10 and Q10 phones, early sales results are not overwhelming. That's not to say that Marvell can't still gain from just modest BB10 growth. But so far, the Street has not been overly impressed with BlackBerry sales. Accordingly, analysts have taken a wait-and-see attitude with BlackBerry, which reports earnings next week.

It wouldn't surprise me to see shares of Marvell inch higher if BlackBerry sales exceed expectations. But this is a risky proposition. Given the gains that Marvell has already posted this year, it just doesn't seem prudent. The best might have already arrived. Before you disagree, I think I did pretty well by timing the bottom when I did last December. This was when the Street was prepared to send Marvell to the glue factory.

Marvell's management deserves plenty of credit for having steered the company from the brink of collapse into a sea of growing margins. But truth be told, even though the company is no longer an ugly duckling, there's still too much that needs to go right for this stock to advance further.

Accordingly, I would advise moving on names like Intel (INTC) and Nvidia (NVDA), which present less risk and more upside potential. It doesn't have to be a case of feast or famine.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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