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.

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click Here to Read Comments
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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!