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While the NASDAQ Composite and Standard & Poor’s 500 were flirting with a correction on Thursday, March 4, Marvell Technology Group (MRVL) has moved into its own better than 10% drop in just the last week. The stock is down 13.89% in the last week as of the close yesterday March 4 at $40.10. The stock is now down 15.66% for 2021 to date was of the close on March 4.

I’m going to use this correction to add the shares to my Jubak Picks Portfolio with a target price of $48 a share today, March 5. The stock pays a tiny 0.60% dividend.

The drop in Marvell’s shares comes on the market’s disappointment with the company’s earnings report after the close of trading on Wednesday, March 3.

The fourth quarter report was strong. Just not strong enough for a stock that had gained more than 80% in 2020.

In the fourth quarter revenue grew by 11% year over year to $798 million. That exceeded Wall Street projections of $786 million in revenue. Non-GAAP earnings grew to 29 cents a share, in line with analyst projections. But earnings were up 70.6% from the same quarter in 2019.

For the full year total revenues came in at $3 billion, up 10% year over year. Non-GAAP earnings of 92 cents per share were up 39.4%.

The company projected first-quarter fiscal revenues of $800 million. That’s above the Wall Street consensus of $784 million. Non-GAAP earnings per share are expected to fall between 23 cents and 31 cents. (The large range, the company says, is due to uncertainty about U.S.-China technology trade restrictions.) The Wall Street consensus on earnings is 27 cents a share, which would be a 50% increase year over year.

What has led me to add this stock to my Jubak Picks on this correction is where the growth came from. Marvell is making a transition away from its past core in storage and storage controllers where the hard disk drive market is in a long-term decline. The company’s goal has been to grow its business in chips for networking, the cloud, 5G, and automobiles. Those growth initiatives put this chip company in the midst of strong growth trends in those sectors–if the company can deliver. I believe that the fourth quarter results showed that Marvell is making good progress on those fronts.

Revenue from 5G, cloud and automotive products doubled from 2020 and looks to account for more than 25% of revenue in 2021, the company said in its conference call. In networking revenue for the quarter was $439 million, relatively flat with the third quarter, but up 24% from the fourth quarter of 2019. In 5G the fourth quarter delivered a sixth straight quarter of sequential revenue growth with strong sales to Samsung and Nokia. Recently Marvell announced that it would partner with Facebook on a circuit board design to provide a 4G/5G OpenRAN distributed unit for the Evenstar program backed by Facebook and a number of telecom supply partners. The target is to have Evenstar equipment ready for network operator trials in 2022.

In its automotive business, quarterly revenues crossed into the double digit million run rate as a result of the production ramp of multiple Ethernet design wins in model year 2021 vehicles. In its conference call the company called 2022 the breakout year for this business.

In addition Marvell has argued that there is a potential $4 billion market for its ARM server chips, which at present account for only a small amount of revenue. This won’t be an easy market for the company to crack given Intel’s (INTC) historic dominance and Advanced Micro Devices’ (ADM) resurgent competitiveness in the area. But the company has scored design wins at Microsoft (MSFT) and other companies that provide support for the company’s projections that it could grow this business faster than the 9% annual growth rate projected for the server chip market as a whole.

I don’t expect that 2021 will be an “uneventful’ year for chip stocks, but I like the growth story for companies with exposure to the automotive, 5G, and cloud sectors. Marvell Technology fits into that mold along with stocks such as NXP Semiconductors (NXPI), a member of my Volatility Portfolio, and Infineon Technologies (IFNNY), a member of my Jubak Picks Portfolio.

The huge drop in the shares this week takes some of the risk out of Marvell shares.