Shares of QLogic Corp. ( (NASDAQ:QLGC) hit a new 52-week high of $16.14 on Aug 15, before closing the trading session a notch lower at $16.07.
QLogic’s shares have been on an uptrend since Jun 15, 2016 when the company announced its takeover by Cavium, Inc. (NASDAQ:CAVM) . Since then, its shares have surged nearly 17.6% compared with a return of 5.5% from the S&P 500 index.
Cavium will be acquiring QLogic in a cash and stock deal worth $1.36 billion, valuing each share at $15.50, subject to regulatory approval. This includes $11.00 per share to QLogic investors in cash and 0.098 of a Cavium share for each share of QLogic. As per Cavium, the combined company will generate $900 million in LTM revenues with $45 million of cost synergies to be achieved by 2017. Furthermore, the deal will boost Cavium’s 2017 non GAAP earnings by 60 to 70 cents. This is a positive for QLogic investors as well.
The acquisition of this Zacks Rank #2 (Buy) stock is expected to close in the current quarter.
Apart from this news, investors also got a boost from the better-than-expected first quarter fiscal 2017 results on Jul 26, 2016. The company surpassed expectations on both top and bottom lines. In addition, it has been improving its product portfolio while also cutting down on expenses to drive growth.
In the recent past, the company showcased its new solutions for NVM Express using Ethernet. It had earlier demonstrated its solutions using the Fibre Channel networks. These developments allow the company to strengthen its place in the storage network applications space.
Other players in the same space that can be considered include Netgear Inc. (NASDAQ:NTGR) and Radcom Ltd. (NASDAQ:RDCM) , both sporting a Zacks Rank #1 (Strong Buy).
QLOGIC CORP (QLGC): Free Stock Analysis Report
NETGEAR INC (NTGR): Free Stock Analysis Report
CAVIUM INC (CAVM): Free Stock Analysis Report
RADCOM LTD (RDCM): Free Stock Analysis Report
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