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Apple (NASDAQ:AAPL) recently posted its best two week performance since 2009 posting a gain of ~15% from its recent lows in the $380's on April 19th. The stock has regained the mantle of the most valuable company in the world by market valuation and its recent rise has been much ballyhooed by the financial media. Less noticed is the rise of the some of the stocks of the smart phone suppliers that provide components to Apple and other manufacturers over the last five trading sessions (See Chart). I think they are moving in sympathy with the giant from Cupertino. Here are two smartphone suppliers that are making my nice moves and are still cheap.


(Click to enlarge)

Skyworks Solutions (NASDAQ:SWKS) offers analog and mixed signal semiconductors worldwide. The company provides power amplifiers and front-end solutions smart phones.

4 reasons SWKS has upside from $23 a share:

  1. Analysts expect revenues to rise at over a 12% CAGR over the next two fiscal years. The stock sports a five year projected PEG of under 1 (.62).
  2. The company has beat earnings estimates by a penny a share each of the last four quarters and consensus earnings estimates for both FY2013 & FY2014 have ticked up over the past three months.
  3. The stock is selling at just 9.3x forward earnings, a discount to its five year historical average (12.8).
  4. The median price target held by the 16 analysts that cover the stock is $31 a share. It has holds over $450mm in net cash on its balance sheet (over 10% of market capitalization).

Avago Technologies (NASDAQ:AVGO) engages in the design, development, and supply of analog semiconductor devices with a focus on III-V-based products. Its product portfolio is comprised of RF amplifiers, RF filters, RF front-end modules, and other communication products. Its components are found in a variety of manufacturer's smartphones.

4 reasons AVGO is going higher from $34 a share:

  1. The 19 analysts that cover the stock have a median price target of $42 a share on AVGO. Charter Equity raised its rating from "Market Perform" to "Buy" this week.
  2. The company has over $1B in net cash on the balance sheet (~12% of market capitalization) and the stock yields 2.4%.
  3. Avago has beat bottom line expectations for six straight quarters and has a five year projected PEG near 1 (1.12).
  4. The company supplies Apple, Samsung (OTC:SSNLF), and even BlackBerry (NASDAQ:BBRY) in the smartphone space. As long as smartphone sales continue to grow, it should be a winner. It sells at a reasonable 12.2x forward earnings.
Source: 2 Smartphone Suppliers Moving Up With Apple