Marvell (MRVL) Reports and Rats at Taco Bell
02-25-07: Marvell Technology Group (MRVL) will finally report earnings after the market closed Monday. Some analysts have upgraded the stock as if MRVL will somehow pull a rabbit out of the hat and surprise the world. The problem is the stock has been running up in the last weeks, settling around $20 per share. Our prediction is MRVL will report inline with expectation. Heck, they might even surprise the market by beating their numbers a little. However, we doubt the stock will move up as a result. This is one of those cases where investors will probably sell on the news. Exercise caution if you decide to take position in this stock. Our view remains the same as our previous evaluation of MRVL.
Yum Brands (YUM)
It is reasonable for one to believe the video of rats running around Taco Bell could have a profound affect on the company’s bottom line (Taco Bell is owned by YUM Brands). It will take awhile before the public forgets about this one. Unlike the previous public relations problems such as the recent E.coli outbreak, the images of large rats running around the restaurant will remain in people’s mind longer than some bacteria we can’t see.
Despite all of this negative news, the truth of the matter is rats are everywhere. Do we really know what goes on in the kitchens of our favorite restaurants? Even fanciest restaurants probably have rat problems. We all know this, but choose to block it out of our mind whenever we eat out. With that said, as an opportunist, we should be hoping these types of news will drive the stock down so we can buy more at a discount or allow investors standing on the sidelines to enter at a low price. While we believed this is a PR nightmare, time will pass and people will eventually forget. Here is to YUM going down to $55 per share!
