Apple (AAPL) has had great success with the iPhone, iPod, iPad, and its computers. This success is likely to continue for the foreseeable future, and there are a handful of companies that benefit from this as they supply Apple with key components used to make its fast-selling products. A number of analysts just came out with very positive comments on the growing demand for iPhones and iPads, which seem to show no signs of letting up. Here are two companies that can participate in the booming market for Apple products. Both have strong balance sheets, revenue growth and a PE ratio that is below the market average.
Corning Incorporated (GLW) shares are trading at $16.56. Corning makes a variety of products ranging from touch screen glass to fiber optics. The shares have traded in a range of $15.45-23.43 in the past 52 weeks. The 50-day moving average is $18.89 and the 200-day moving average is $19.63. Earnings estimates for GLW are at $2.04 per share in 2011, and $2.24 for 2012, so the PE ratio is about 8 on these shares. The book value is $12.96 per share. Corning makes and supplies Apple with the glass touch screens used in many tablet devices and cell phones. This company pays a dividend of 20 cents per year, which is equivalent to a 1.2% yield.
A Goldman Sachs analyst recently raised concerns about demand for LCD televisions, which has prompted a sell-off in shares of companies like Corning since it supplies LCD TV makers. This is creating a buying opportunity for medium to longer term investors in Corning. However, with the stock acting weak, it makes sense to buy in stages and average in over time since it could see additional downside.
Cirrus Logic, Inc. (CRUS) shares are trading at $15.93. Cirrus Logic is a leading maker of specialized semiconductors and is based in Texas. The 50-day moving average is about $15.46 and the 200-day moving average is $17.39. Earnings estimates for CRUS are expected to be $1.23 for 2011 and $1.49 for 2012. The book value is $6.38 per share. Cirrus supplies Apple with chips and derives a substantial amount of revenue from it.
This stock has also been trading weak lately and could be offering investors a solid buying opportunity. As with any stock showing weakness, it makes sense to average in over time so you can take advantage of any further dips. In the long run, this company seems to be well-positioned to continue supplying Apple and will benefit from the continued high consumer demand for iPhones and iPads.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GLW over the next 72 hours.