Office Depot Inc (ODP), Compuware Corporation (CPWR), Integrated Device Technology Inc (IDTI): Is Starboard Value Right on These Three Companies?

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Investors of Compuware Corporation (NASDAQ:CPWR) will get benefits of the business expansion of its subsidiary, Covisint, while Compuware’s cost reduction plan will be beneficial in the next two years.

New products driving revenue

The communication segment contributes 58% of the revenue of Integrated Device Technology Inc (NASDAQ:IDTI). In the quarter ending in March 2013, new products of the company contributed around 21% in revenue, which is a 2% increase from the previous quarter.

In May 2013, total subscribers of 4G long term evolution, or LTE, were 55 million in North America as per the research report from Informa. The company launched a new product, “Serial RapidlO” which is used in 4G wireless communication of high-speed data for mobile phones and data terminals. Currently, North American service providers are building 4G wireless infrastructure. Taking this into consideration, growth of 4G LTE will further push demand for its interface in North America. The company estimates 3% quarter-over-quarter growth in the communication segment with the launch of its new product Serial RapidIO.

China’s largest service provider, China Mobile Ltd. (ADR) (NYSE:CHL), is planning to expand 3G and 4G LTE base stations in China. In the initial phase, it established 20,000 base stations in China, which will be 200,000 in total across 100 Chinese cities by the end of 2013. In May 2013, China Mobile Ltd. (ADR) (NYSE:CHL) issued a tender worth $6.46 billion for LTE.

Integrated Device Technology Inc (NASDAQ:IDTI), being a global market leader in LTE devices, is expecting a huge order from China Mobile. The company is already supplying LTE to China Mobile Ltd. (ADR) (NYSE:CHL)’s LTE pilot project. However, tenders will be allotted at the end of June 2013. If a contract from China Mobile is received, it will give massive benefits to the company by the end of 2013 and 2014.

Integrated Device Technology Inc (NASDAQ:IDTI) is anticipating revenue of around $90 million from its new products in fiscal year 2013, which means growth of 65% year over year. China Mobile’s LTE base stations order will significantly increase revenue of the company.


The merger with OfficeMax will reduce operating costs of Office Depot Inc (NYSE:ODP), and selling a loss-making Mexican subsidiary will halt further losses.

Covisint’s plan to expand in other verticals will boost the revenue of Compuware Corporation (NASDAQ:CPWR). Moreover, Compuware’s cost reduction plan will improve profits during next fiscal year.

The new product line of Integrated Device Technology Inc (NASDAQ:IDTI) is promising. Also, a new LTE contract from China Mobile will boost the revenue of the company in 2013 and 2014.

I recommend buying all three stocks.

The article Is Starboard Value Right on These 3 Companies? originally appeared on and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool owns shares of China Mobile. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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