Billionaire Ken Griffin Takes 5% Stake In QLogic

We can compare QLogic to Emulex Corporation (NYSE:ELX), Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), and Broadcom Corporation (NASDAQ:BRCM). Emulex, possibly the closest peer, has also been experiencing falling earnings and now has cash representing a large share of its valuation. In forward earnings and cash flow terms it is slightly cheaper than QLogic though the business is smaller and potentially a riskier investment. Intel and Cisco both trade at 10 times forward earnings estimates, and have market capitalizations of over $100 billion. Intel has been struggling, with a small decline in revenue in the fourth quarter of 2012 versus a year earlier causing a 27% drop in earnings, but that stock also pays a dividend yield above 4%. Cisco continues to report growth numbers and we think it’s worth considering as a value stock. Broadcom’s performance has not been particularly good recently, and as a result the trailing P/E is above 20; however, the sell-side expects the company to recover and return to a higher level of earnings.

It’s interesting to see Citadel getting involved with the company, but from our perspective QLogic’s financials don’t make it attractive enough to be worth buying. The substantial cash of course prevents it from being a short as well, but value investors might be better off considering Cisco or possibly Intel.

Disclosure: I own no shares of any stocks mentioned in this article.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!