Apple (AAPL) has revolutionized the music business with the iPod, as well as the computer market with the Mac and the iPad tablets. This company has been extremely successful in creating a rich user experience and this has enabled it to create an "ecosphere." Apple currently dominates the smartphone market and the tablet market. Soon, the company could be offering a newly designed "Apple TV," which is expected to offer streaming movies, television shows and more.
Apple has outsourced manufacturing for many parts and components used in the iPad and iPhone. A number of publicly traded companies have made chips, cameras and other items used to make some of Apple's most popular products. Some of these companies have prospered from all the orders received for these components, and it's likely that the Apple TV will create a tremendous amount of new business for certain companies as well. The Apple TV is likely to be like a giant iPad and highly compatible with all the other Apple products and services like iTunes. Here are a number of companies that could be poised to supply parts and components for the new Apple TV. With that in mind, these stocks could be poised for large gains:
OmniVision Technologies (OVTI) manufactures Camerachip sensors used in mobile phones like the iPhone and tablets like the iPad. Apple is likely to have a camera in any TV it develops. A camera would enable the TV to be used for video conferencing, photos, and possibly as a home monitoring device that could be accessed by an iPhone or iPad when traveling, for example. While it's not clear who might make a camera for the Apple TV, it seems likely that OmniVision could be involved. This company has a strong balance sheet and the stock is a solid buy on dips.
Here are some key points for OVTI:
Current share price: $15.77
The 52-week range is $10.15 to $37.04
Earnings estimates for 2011: $1.44 per share
Earnings estimates for 2012: 71 cents per share
Annual dividend: none
Nuance Communications, Inc. (NUAN) develops voice recognition technology and software used in devices like Apple's iPhone (SIRI). Imagine not needing a remote, but rather just talking to your TV. You could tell it to flip through channels, you could ask it when your favorite show is on. You could command it to record a program. Nuance could continue to be a huge beneficiary of the growing demand for voice-recognition, so buying this stock on dips makes sense.
Here are some key points for NUAN:
Current share price: $29.42
The 52-week range is $15.56 to $29.96
Earnings estimates for 2011: $1.61 per share
Earnings estimates for 2012: $1.77 per share
Annual dividend: none
Corning Inc., (GLW) makes a product called "Gorilla Glass," which is used on flat screen televisions and some of the most popular tablet computers and mobile phone devices. This company plans to launch "Gorilla Glass 2.0," which could fuel growth. Corning makes the specialty glass used on iPads and iPhones, and it seems very likely that Apple would use "Gorilla Glass" for any TV it develops. Corning is very undervalued and even trades below book value of $13.79 per share. It also looks like a bargain based on the price-to-earnings ratio, which is only about 7 times earnings.
Here are some key points for GLW:
Current share price: $13.58
The 52-week range is $11.51 to $23.43
Earnings estimates for 2011: $1.68 per share
Earnings estimates for 2012: $1.72 per share
Annual dividend: 30 cents per share, which yields 2.2%
Cirrus Logic, Inc. (CRUS) makes chips that are used in products like mobile phones, tablets, DVD players, and more. Since this company makes specialized audio chips for the Apple iPhone and the iPad, it will likely make chips for the Apple TV. Cirrus has a strong balance sheet and the company is poised for growth. The stock is trading at a reasonable price-to-earnings ratio of about 13 times forward earnings. If additional revenue from an Apple TV come into play later this year, this stock could move much higher.
Here are some key points for CRUS:
Current share price: $20.95
The 52-week range is $12.52 to $25.48
Earnings estimates for 2011: $1.30 per share
Earnings estimates for 2012: $1.51 per share
Annual dividend: none
Broadcom Corporation (BRCM) designs and makes specialized semiconductor chips used in some of Apple's top products including the iPhone. Apple is one of Broadcom's largest customers. Since it is likely that any Apple TV would also be a communication device, these chips could easily find their way into more Apple products. Broadcom has a strong balance sheet and the stock offers value with a price-to-earnings ratio of just about 12 times earnings.
Here are some key points for BRCM:
Current share price: $37.67
The 52-week range is $27.59 to $46.75
Earnings estimates for 2011: $2.83 per share
Earnings estimates for 2012: $2.75 per share
Annual dividend: 40 cents per share, which yields 1.1%
Qualcomm Inc., (QCOM) supplies Apple and many other top-selling smartphone makers with its specialized chips. Qualcomm also makes the chipsets used in the Apple iPad. According to one article, Qualcomm is likely to supply chips for the upcoming iPhone 5, the next iPad and the Apple TV. This company continues to show growth and the stock looks poised to make new 52-week highs in the near future.
Here are some key points for QCOM:
Current share price: $61.06
The 52-week range is $45.98 to $61.95
Earnings estimates for 2011: $3.57 per share
Earnings estimates for 2012: $3.99 per share
Annual dividend: 86 cents per share, which yields 1.4%
Apple, Inc. has created a technology ecosphere with products like the iPhone and the iPad and services like iTunes. This company is likely to create and launch a revolutionary TV which could be loaded with features like voice-recognition, video conferencing, access to iTunes, movies, entertainment, the Internet and much more. As noted, chances are that the Apple TV will be a lot like a giant iPad with a few extra new features. This stock is likely to make new 52-week highs when new products like the iPhone 5 or the Apple TV is launched later this year.
Here are some key points for AAPL:
Current share price: $459.68
The 52-week range is $310.50 to $460
Earnings estimates for 2011: $41.37 per share
Earnings estimates for 2012: $46.16 per share
Annual dividend: none
Data sourced from Yahoo Finance. No guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.