British Petroleum (BP) #1 [9]

BP p.l.c. is an oil company with four main businesses:
Exploration and Production, Gas, Power and Renewables, Refining
and Marketing, and Petrochemicals. Exploration and Production
includes oil and natural gas exploration and field development
and production, together with pipeline transportation and
natural gas processing. Since 1997, BP has increased its
reserve base from 8.6 billion barrels of oil equivalent to 18.3
billion.

The company is also the largest oil company involved with
alternative sources of energy. BP is advertising itself as
Beyond Petroleum. The company is pursuing opportunities in the
growing Liquefied Natural Gas (LNG) market, and we find this
diversified strategy attractive in this environment.

BP's operating efficiencies are evident from the fact that
despite tying-up substantial amounts of capital in ongoing
development projects, it has maintained competitive returns on
capital. The company's returns should move-up, as these
projects start coming online over the next few years. Also, the
company's disciplined financial management and strong balance
sheet enable it to continue paying significant amounts to
shareholders, both through a growing dividend and through ADS
buybacks. During 2004, BP's ADS dividend increased 13% year-
over-year. Also, BP repurchased 827 million of its outstanding
ADS, for a total of $7.5 billion. Given our outlook for stable
outlays and leverage already within management's targeted
range, prospects remain positive for continued capital returns
to shareholders.

Additionally, we like the solid 3% dividend yield on BP.
Management is shareholder-friendly and vows to return 100% of
free cash flows to investors as long as crude oil stays above
$20 a barrel. With crude oil flirting with $60 a barrel, cash
flows to investors should be quite ample for as far as the eye
can see. The diversified nature of their business and their
emphasis on alternative sources of energy draw us to the stock.

As with every other energy company, BP is enjoying the fruits
of record-high oil prices. With crude prices around $65 a
barrel, the company is minting money and throwing off large
amounts of cash flows back to shareholders. Analysts have been
raising their estimates in earnest over the past three months.
Over that time period, estimates for the year ending December
2005 have increased almost 15% to $6.55. This is even more
impressive when you consider the sheer size of the company. It
seems apparent that crude oil will remain elevated for the
foreseeable future, which means estimates for the future are
bound to go up as well.

Marvell Technology Group Ltd. (MRVL) #1 [?]

Marvell Technology Group designs and develops analog and mixed
signal components as well as digital signal processors for the
storage and networking markets. The company's goal is to
provide for increased bandwidth as communication solutions
evolve. It achieves this with state-of-the-art chip solutions
that enable data transfer in data storage devices and
networking applications. Incorporated in Bermuda with U.S.
headquarters in Sunnyvale, CA, MRVL designs and develops
semiconductor solutions that enable consumers to store and move
digital data at high speeds and low error rates.

Marvell has been on a meteoric growth path over the past
several years. Sales are up more than tenfold since 2000, with
sales growth averaging 120% since then. This blistering pace
will likely slow to a still-strong 20%-25% clip over the next
several years.

Often times with high-growth technology companies, there are
struggles with debt and balance sheet issues. This is not the
case with Marvell. Their debt-free balance sheet is in superb
financial shape, with more than $500 million in cash and
investments. The firm continues to bolster its financial
stability by consistently generating positive free cash flow.

The company targets top equipment makers in the enterprise
storage and networking markets with its broad spectrum of
integrated circuits. Marvell leverages its ability to
incorporate high levels of integration into a single-chip
solution to tap new markets. Outsourcing chip production
contributes to a relatively lean cost structure, which in turn
increases profitability.

The company reported a strong earnings report for its fiscal
year 2006 second-quarter. Earnings came in at 31 cents per
share, two cents ahead of the consensus estimate and well ahead
of last year's 20 cents. They also lifted their future guidance,
which caused a nice pop in the stock. Management said that
their networking and mobile HDD segments performed extremely
well during the quarter.

The stock is currently trading around 29x next year's estimates
of $1.55 per share. This is slightly above the long-term growth
rate of 26.33%, giving the stock a PEG ratio of about 1.1. This
is certainly not unreasonable for a company with such great
earnings momentum and future prospects.