One Reason Marvell Technology Group (MRVL) Stock is Rising Today

NEW YORK (TheStreet) -- Shares of Marvell Technology Group  (MRVL) surged 5.99% to $15.94 in morning trading Thursday after reports earlier this week indicated that China Electronics  (CEHD) could be interested in making a bid for Marvell's mobile phone chip business.

Marvell's mobile phone chip unit relies significantly on sales of 3G and 4G phones used on China Mobile's network.

The stock spiked Tuesday when the report first emerged and closed near the $15 mark.

More than 6.9 million shares had changed hands as of 10:59 a.m., which beat the daily average volume of 5,602,960. The stock holds a 52-week low of $11.65 and a 52-week high of $16.65.

Separately, TheStreet Ratings team rates MARVELL TECHNOLOGY GROUP LTD as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MARVELL TECHNOLOGY GROUP LTD (MRVL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, growth in earnings per share, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• MRVL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.04, which clearly demonstrates the ability to cover short-term cash needs.
• MARVELL TECHNOLOGY GROUP LTD's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MARVELL TECHNOLOGY GROUP LTD increased its bottom line by earning $0.64 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.64).
• The gross profit margin for MARVELL TECHNOLOGY GROUP LTD is rather high; currently it is at 53.56%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MRVL's net profit margin of 12.39% significantly trails the industry average.
• Net operating cash flow has slightly increased to $194.64 million or 9.84% when compared to the same quarter last year. Despite an increase in cash flow, MARVELL TECHNOLOGY GROUP LTD's average is still marginally south of the industry average growth rate of 11.80%.
• You can view the full analysis from the report here: MRVL Ratings Report