Apple (NASDAQ:AAPL) continues to see very strong demand for its iPhone, iPod, iPad and Mac computers. This success is likely to continue for the foreseeable future and a handful of companies, who supply Apple with key components used to make their fast selling products, stand to benefit . While a direct investment in Apple (AAPL) seems to be a solid decision, some investors might also be interested in investing in Apple's suppliers in order to increase gains and diversify their portfolios. Most of these companies have other customers and other product lines so it broadens the investment exposure.
Here are some stocks to consider since they should grow along with Apple:
- Corning Incorporated (NYSE:GLW) shares are trading at $13.40. Corning makes a variety of products ranging from touch screen glass to fiber optics. The shares have traded in a range between $11.51 to $23.43 in the past 52 weeks. The 50-day moving average is $13.89 and the 200-day moving average is $18.38. Earnings estimates for GLW are at $1.84 per share in 2011, and $1.97 for 2012, so the PE ratio is about 7 on these shares. The book value is $13.56 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 30 cents per year, which is equivalent to a 2.1% yield. This stock has plunged with the markets and now offers a chance to buy at bargain levels. UBS has a $20 price target and a buy rating on the stock. The company recently increased the dividend payout by 50% and announced plans to buy back about $1.5 billion worth of stock. Read more on that here.
- Cirrus Logic, Inc. (NASDAQ:CRUS) shares are trading at $16.55. Cirrus Logic is a leading maker of specialized semiconductors and is based in Texas. The shares have traded in a range between $12.39 to $25.48 in the past 52 weeks. The 50-day moving average is about $14.74 and the 200-day moving average is $17.35. Earnings estimates for CRUS are expected to be $1.24 for 2011 and $1.46 for 2012. The book value is $6.04 per share. Cirrus supplies Apple with chips and derives a substantial amount of revenue from them. This stock has been volatile and is providing many trading opportunities. This company seems to be well positioned to continue supplying Apple and will benefit from the continued high consumer demand for iPhones and iPads. However, it has rebounded recently so I would wait for pullbacks.
- OmniVision Technologies (NASDAQ:OVTI) shares are trading at $15.87. OmniVision sells the Camerachip sensors used in mobile phones and other computer devices. The 50-day moving average is about $20.19 and the 200-day moving average is about $28.43. These shares have traded in a 52 week range between $12.60 and $37.04. Earnings estimates for OVTI are about $2.35 per share in 2011, and $2.37 for 2012. This stock dropped significantly in the past few weeks when the company lowered guidance leading some to wonder if this was over whether or not Apple (AAPL) would still keep OmniVision as a main supplier. Some believe Sony (NYSE:SNE) might be taking business away from OmniVision. It's smart for Apple to have multiple suppliers and the market is probably big enough for both companies to benefit. This stock is still acting weak so it only makes sense to buy in stages in case it drops further.
- Intel Corporation (NASDAQ:INTC) shares are trading at $22.29 The 50-day moving average is about $20.88 and the 200-day moving average is about $21.24. These shares have traded in a 52 week range between $18.90 and $23.96. Earnings estimates are about $2.36 for 2011 and $2.45 for 2012. This gives INTC shares a PE ratio of only about 9 times earnings. The dividend is 84 cents per share, which is a yield of about 3.8%. Intel has a huge amount of cash on the balance sheet- about $20 billion. In the long run, these shares offer growth potential, a solid dividend, a fortress-like balance sheet and a low PE ratio which makes this a low risk way to invest in technology. Intel is an Apple supplier but Intel is so large that the benefit will not have as much impact as some of the other companies here. I would wait to buy this stock on dips.
- SPDR Select Sector Technology Fund (NYSEARCA:XLK) shares are trading at $24.30. XLK is an exchange traded fund that primarily invests in technology stocks. The 50-day moving average is $24.05 and the 200-day moving average is $25.32. The 52 week range is $22.47 to $27.09. This ETF holds investments in companies like Apple (AAPL), Microsoft (NASDAQ:MSFT), Intel (INTC) and others. Many of the tech companies in this fund have incredibly strong, cash-rich balance sheets that will allow financial flexibility in bad economic times. Apple shares are the largest position in this fund, totalling about 14.6% of the assets. See that here. This is a great way to get some of the potential upside in Apple and still have the diversification and safety of other great tech stocks.
- Sony Corporation (SNE) shares are trading at $18.25. The 50-day moving average is about $20.80 and the 200-day moving average is about $28.26. These shares have traded in a 52 week range between $18.90 and $23.96. Earnings estimates are about 79 cents for 2011 and $1.11 for 2012. Some believe Sony is taking business from OmniVision as an Apple iPhone supplier, but like Intel, Sony is so large that the benefit will probably not have as much impact as some of the other companies here. This stock is in a downtrend and I would wait for signs of a bottom before considering an investment.
- Apple, Inc. (AAPL) shares are trading over $369.80. Apple is a leading maker of computers and mobile devices. The 50-day moving average is $383.42 and the 200-day moving average is $354.36. Earnings estimates for AAPL are about $27.70 per share in 2011 and $32.79 for 2012. However, these estimates appear to be too low. The 52 week range is $290 to $422.86. Apple is a great company and will probably continue to be a solid investment for the foreseeable future. I believe Steve Jobs has built unstoppable momentum and put this company on the right track for the foreseeable future. Dips to about $355 look like particularly good buying opportunities since this is right around a key support level (the 200-day moving average).
The data is sourced from Yahoo Finance. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.