If you like to trade, Mellanox (NASDAQ:MLNX)
may be the stock for you, as there is more than average uncertainty and
volatility around these shares as the company looks to benefit from
growing adoption of high-speed connectivity products but also faces
competitive threats from well-run rivals like Intel (NASDAQ:INTC) and Broadcom (NASDAQ:AVGO).
Although
the company has been on an unfortunate run of weaker-than-expected
quarters (and weaker guidance), the shares are still up about 15% from
the time of my last article
(ahead of Intel, weaker than Avago, and in line with the Nasdaq), and
expectations have come down significantly. While the competitive threat
of Intel still looks manageable, the last few quarters have highlighted
that for all of the growth potential in Mellanox's core markets, that
growth isn't going to come in predictable clockwork fashion. While I
have gotten a little more cautious with my modeling, I still believe
these shares are undervalued even with a double-digit discount rate.
Click here to continue:
Turbulence Creates Another Opportunity At Mellanox
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