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.