MaxLinear Is a Value Play With 50% Upside

MaxLinear, Inc. (NYSE: MXL)

Technology; Semiconductor ICs ; 40%-50% Upside

MaxLinear, Inc. is exposed to the growth prospects of digital TV, communication infrastructure and the need for high bandwidth. Acquisition of Entropic is a boost to the bottom line through cost synergies and a supplement for future growth through increased addressable market. MXL is a very cheap proposition as the stock supports a multiple of 12 while earnings are expected to grow at 20% p.a. for the next five years. Our EVA model and Prudena's model reveal an upside of ~50%. In our view, MXL is one of the best value plays around.