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at Investor's Business Daily (Dec 12, 2014)
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- Since we recommended buying Skyworks in October 2013, its share price has appreciated 169.45%.
- From a long-term perspective, several factors continue to bode well for Skyworks, despite current gains.
- It is prudent to book profits at current levels as valuation has become pricier, while some momentum and seasonal headwinds are developing.
Skyworks: The Explosive Growth Catalyst Management Can't Talk About
- Skyworks' business is firing on all cylinders, thanks to highly visible industry tailwinds.
- "Connecting the dots" from public filings reveals a development agreement for a disruptive technology that could transform the company's profitability in a matter of months.
- Margins for RF filters could increase as much as 55%.
- A rare opportunity to exploit informational advantage.
- Skyworks has raised its revenue and earnings outlook for the fourth quarter of fiscal 2014.
- Skyworks will continue to benefit from the success of Apple's iPhone 6 and iPhone 6 Plus new smartphones.
- Skyworks has been able to record double-digit earnings and revenue growth six quarters in a row and an earnings per share surprise in each one of the last four quarters.
3 Reasons Why This Tech Stock Will Continue To Grow
- Skyworks Solutions has appreciated almost 100% in 2014.
- The company beat analysts' estimate yet again, and should continue soaring.
- Skyworks is well-positioned to benefit from the Internet of Things.
- The launch of Apple's iPhone 6 is expected to benefit Skyworks.
- Skyworks is still a great buy.
Skyworks Solutions: An Investment Opportunity In A Fast-Growing Tech Stock
- Skyworks will benefit from the highly anticipated next month's Apple's iPhone 6 launch.
- Skyworks is an excellent combination of a good value and strong growth tech stock.
- Skyworks has been able to record double-digit earnings and revenue growth six quarters in a row.
- Skyworks (SWKS) Q3 earnings should leave investors feeling more confident than ever.
- Recent guidance has confirmed my buy/hold thesis and raised my target price derived from a combination of comparable companies and DCF analysis to $60.
- While the stock rose significantly following earnings, there is still more upside in the tank.
Skyworks: Short- And Long-Term Catalysts Still Abound
- Mobile device releases over the next few quarters will act as a short-term catalyst for Skyworks.
- The Internet of Things (IoT) will provide sustainable earnings growth as a long-term catalyst.
- Skyworks has seen huge gains YTD, but there is still plenty of stock appreciation left in the tank.
- Skyworks supplies to some of the biggest and best-in-class businesses in the world.
- Internet of Things and rapid efforts in technology advancements are likely to accelerate Skyworks' growth going forward.
- Impressive financials, tendency to beat analysts' expectations, raised guidance, and initiation of a dividend program make for an exciting stock.
- Skyworks and Apple keep hitting 52-week highs. If you're considering selling at these levels, don't do it; both companies are heading higher.
- Skyworks raised third-quarter guidance, which bodes well for Apple.
- Apple and Skyworks are both well-positioned to benefit from the "Internet of Things".
- China provides growth for both Apple and Skyworks.
- The release of the iPhone 6 will bolster both Apple's and Skywork's sales.
- SWKS has the highest combined Equities Lab Buzz, Income Statement, Balance Sheet, Value, and Cash Flow Score in its entire industry.
- The stock appears undervalued by at least 20% based on its forward P/E, price to free cash flow, and price to cash flow.
- The numerous fundamental green flags make SWKS a solid long-term buy.
- Skyworks Solutions Inc. has an outstanding existing customer base.
- The company's financial strength is unparalleled in its industry and still trades at a discount to peers.
- The demand for its products will continue to grow in today's internet of things.
Skyworks Solutions: 3 Different Insiders Have Sold Shares During The Last 30 Days
- 3 insiders sold Skyworks stock within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- 2 of these 3 insiders decreased their holdings by more than 10%.
- Skyworks beat estimates with $481 million in revenue, up 13% year over year, and $0.62 diluted EPS, up 29% year over year.
- Estimates for Q3 are $535 million in revenue and diluted EPS of $0.73.
- Historical analysis of Skyworks shows that it is trending upwards and poised for growth as a result of smartphones and the Internet of Things industry.
- Skyworks' earnings will be announced on April 22, with revenue projected at $470.26 million for the quarter.
- Smartphone growth in emerging markets and Apple's relationship with China Mobile will drive revenue growth in the coming year.
- The advancement of Machine-to-Machine technology and the Internet of Things industry make Skyworks a well-positioned play.
- Skyworks has a cheap valuation and financials that beat its peers.
Skyworks: A Few Convincing Reasons Why You Should Buy This Apple Supplier
- Even after 33% appreciation in 2014, Skyworks Solutions still has a lot of room to grow.
- The company has added a suite of products to benefit from the increasing deployment of LTE.
- LTE handsets are expected to double in volume in 2014 and Skyworks is set to benefit from it.
- Apple’s iPhone 6 can also provide a massive boost in 2014.
- Skyworks is a great buy at present valuations and the proposed plan to initiate a dividend makes it even more lucrative.
Missing This Stock Means Missing A Lucrative Investment
Tue, Dec. 23, 1:54 PM
- Rosenblatt Securities' Jun Zhang thinks China Mobile plans to procure a whopping 200M 4G smartphones in 2015, after selling 75M-80M in 2014 (~20% less than originally planned). Smaller rivals China Telecom and Unicom are seen collectively procuring 80M.
- Given the relatively high DRAM content of 4G phones, Zhang expects Micron (MU +1.3%) to benefit from the sales growth. Skyworks (SWKS -1.1%), meanwhile, is deemed well-positioned due to its high Chinese 4G power amplifier share; the higher RF content of 4G phones relative to 3G models also doesn't hurt.
- TrendForce recently forecast mobile DRAM, which tends to carry higher ASPs/margins than PC DRAM, would account for 40% of 2015 DRAM output, up from 2014's 36%. The firm also forecasts mobile demand and healthy pricing will lead industry DRAM sales to rise 16% next year to $54.1B.
- Chinese 4G phone demand was among the positives cited by Brean yesterday while hiking its targets for Skyworks rivals RF Micro and TriQuint. Strong iPhone production and healthy pricing/margins were among the others.
Thu, Dec. 4, 12:14 PM
- Avago (AVGO +7.7%) has soared above $100 after beating FQ4 estimates, reporting a stronger-than-expected gross margin, and providing above-consensus FQ1 guidance.
- RF component peers Skyworks (SWKS +4.2%), RF Micro (RFMD +3.9%), and TriQuint (TQNT +4%) are also up, as is fellow iPhone supplier Cirrus Logic (CRUS +2.6%). Cirrus recently sold off after Deutsche cut its calendar Q1 iPhone production forecast.
- On its CC (transcript), Avago noted wireless growth (+73% Q/Q and +83% Y/Y) was "largely driven by the ramp of a new smartphone generation and a large North American smartphone OEM" (undoubtedly Apple).
- Avago added it also saw strong demand for FBAR filter-related products (gaining share due to 4G RF requirements) elsewhere, with demand from Chinese 4G phone OEMs particularly strong. Over 80% of wireless revenue is now FBAR-related.
- Avago expects wireless revenue to be "flat to perhaps slightly down" Q/Q in seasonally weak FQ1, with strong demand from Apple (referred to once more as "a large North American smartphone OEM") offsetting seasonal declines elsewhere. The company notes it remains "very capacity-constrained," and has been making investments to deal with the issue.
- At least 10 sell-side firms have hiked their targets.
Wed, Nov. 26, 2:52 PM
- Chip stocks are outperforming after Analog Devices (ADI +5.2%) beat FQ4 estimates and offered in-line FQ1 guidance. The Philadelphia Semi Index (SOXX +1.9%) has made new highs.
- Notable gainers include many analog/mixed-signal and telecom IC firms: TXN +3%. LLTC +2.7%. SMTC +3.1%. ISIL +3.3%. SWKS +3.7%. AVGO +2.9%. OVTI +3.2%. FSL +3.1%. EZCH +2.5%. XLNX +2.3%. ALTR +2.1%. MX +4.3%. PMCS +2.7%. BRCM +2%.
- On its CC (transcript), ADI noted its telecom equipment chip sales are holding up well in spite of weak capex, aided by the fact its dollar content for 4G base stations is "at least 20% to 30% better" than for 3G base stations. The company also mentioned its lead times were stable in FQ4.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Tue, Nov. 11, 5:11 PM| Comment!
Fri, Nov. 7, 3:18 PM
- Skyworks (SWKS -3.7%) has received at least seven target hikes since delivering above-consensus FQ1 guidance yesterday afternoon and upping its dividend. But shares are nonetheless seeing profit-taking following a huge 2014 rally. Peers RF Micro (RFMD -4.4%), TriQuint (TQNT -4.1%), and Avago (AVGO -3%), each of which has also fared well this year, are also selling off.
- Needham (target hiked to $70) notes FQ4 results benefited from "broad-based demand drivers including content gains at multiple smartphone OEMs, the LTE ramp in China, the 3G upgrade cycle in emerging markets, multi-stream 802.11ac [Wi-Fi] deployments and [high-power amplifier] penetration across multiple vertical end markets." It also observes management "expects revenue will continue to grow at a rate faster than the industry in F1Q15 and FY15 overall."
- Oppenheimer declares the RF component boom cycle to be in its early innings. Pac Crest thinks Skyworks' Apple sales are offsetting Samsung weakness, and is upbeat about strong non-mobile demand. "Channels remain lean and inventory build suggests good multi-quarter visibility," says BofA/Merrill.
- Shares currently go for 14x the pre-earnings FY15 (ends Sep. '15) EPS consensus exc. net cash; the consensus should go up post-earnings.
Thu, Nov. 6, 4:51 PM
- Skyworks (NASDAQ:SWKS) expects FQ1 revenue of $770M (+52% Y/Y) and EPS of $1.18, above a consensus of $737.7M and $1.08.
- Also: Skyworks is hiking its quarterly dividend by 18% to $0.13, good for a 0.9% yield at current levels. Its next dividend is payable on Dec. 11 to shareholders on record as of Nov. 18.
- The RF chipmaker declares it's "now scaling to more than a $3 billion revenue run-rate with annualized non-GAAP earnings per share approaching $5.00." FY15 (ends Sep. '15) consensus revenue and EPS estimates are currently at $2.84B and $4.08.
- FQ4 revenue was in-line with the forecast Skyworks provided in its Oct. 14 guidance hike, while EPS managed to beat. Gross margin rose to 45.9% from 44.4% a year ago, and op. margin to 32.8% from 27.3%.
- With shares up 118% YTD going earnings, a decent amount of good news was priced in.
- FQ4 results, PR
Thu, Nov. 6, 4:30 PM| 3 Comments
Mon, Oct. 20, 5:21 PM
- iPhone suppliers are trading higher after Apple beat FQ4 estimates and issued FQ1 guidance that was mostly above consensus. FQ4 iPhone sales of 39.3M were better than expected, and iPad sales of 12.3M worse than expected.
- Cirrus Logic (NASDAQ:CRUS) +1.4% AH. Avago (NASDAQ:AVGO) +1.2%. Skyworks (NASDAQ:SWKS) +1.2%. RF Micro (NASDAQ:RFMD) +2.4%. NXP (NASDAQ:NXPI) +2%.
Tue, Oct. 14, 9:33 AM
- Skyworks (NASDAQ:SWKS) expects FQ4 (Sep. quarter) revenue of $718M and EPS of $1.08, above a consensus of $679.5M and $1.01. Full FQ4 results arrive on Nov. 6.
- The RF component maker also hiked its FQ3 guidance in June. Strong iPhone 6-related demand may have contributed to the latest hike, given recent reports.
- Peers are also up strongly amid a higher open for equities: RFMD +5.5%. TQNT +5.3%. AVGO +3%. Like other chip stocks, the group sold off on Friday following Microchip's warning.
Tue, Oct. 14, 9:15 AM
Fri, Oct. 10, 9:59 AM
- Microchip's (MCHP -12.5%) calendar Q3 warning, which was accompanied by a declaration that it believes "another industry correction has begun and that this correction will be seen more broadly across the industry in the near future," is taking a heavy toll on chip stocks (SOXX -5.5%).
- Intel (INTC -4.2%) and many other chipmakers have joined the several firms that sold off AH yesterday in going in the same direction as Microchip: MU -5.8%. FSL -8.5%. BRCM -3.6%. SWKS -7.5%. RFMD -6.2%. XLNX -4.9%. MXIM -5%. AMBA -5.5%. IDTI -6.7%. CAVM -7.4%. AVGO -10.2%. SMTC -4.3%. SYNA -4.1%. POWI -6.9%.
- Chip equipment makers are also getting hit: AMAT -3.5%. KLAC -3.3%. LRCX -2.3%. UTEK -2.5%. KLIC -2%.
- As Microchip noted in yesterday's warning, the company's very diversified customer base, together with its recognition of distributor revenue on a customer sell-through basis rather than a distributor sell-in basis, often allow it to see industry changes before peers.
- The microcontroller vendor added its warning was driven by a September decline in sales to Chinese clients, and observed it has typically "returned to sequential revenue growth after two quarters" during past downturns.
- Chip stocks have had a good run over the last 12 months, aided by healthy mobile demand and the industry's consolidation wave.
Wed, Sep. 24, 1:40 PM
- Predicting the companies will benefit from a "golden age" for RF components (echoes of recent analyst notes), MKM's Ian Ing has launched coverage on Skyworks (SWKS +2.9%) and RF Micro (RFMD +2.5%) with Buy ratings. His targets are respectively $68 and $15. TriQuint (TQNT +2.7%) is following RF Micro higher.
- Ing expects Skyworks' Panasonic RF filter JV to provide both technology and gross margin benefits, and thinks the company can achieve $5/year in EPS earlier than expected; the FY15 (ends Sep. '15) EPS consensus is currently at $3.93.
- Regarding RF Micro, he likes the company's post-merger revenue synergies with TriQuint, and also its Chinese 4G exposure. "The main risk we see is RFMD's ability to balance post-merger synergies with supply requirements in serving steep OEM ramps."
- Skyworks is making new post-Dot.com bubble highs. RF Micro and TriQuint aren't far removed from post-bubble highs of $12.98 and $21.48.
Fri, Sep. 19, 9:36 AM
- iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
- In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), and envelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
- In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor - specifically, a 6-axis gyroscope/accelerometer - was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
- Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) can claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
- Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC. Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
- As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor, and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
- Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.
Wed, Sep. 3, 12:16 PM
- Apple suppliers Cirrus Logic (CRUS -3%), GT Advanced (GTAT -5%), Skyworks (SWKS -2.3%), TriQuint (TQNT -2.6%), and RF Micro (RFMD -2.8%) are following Apple lower after Pac Crest recommended investors start taking profits on the tech giant ahead of its Sep. 9 event. Expected iPhone 6 motion sensor supplier InvenSense (INVN -3.3%) is also off.
- GT was hit recently by two downgrades, partly offset by a bullish coverage launch. InvenSense, Skyworks, TriQuint, and RF Micro have all rallied strongly over the last 3 months.
Fri, Aug. 29, 11:03 AM
- Avago (AVGO +8.1%) has received a slew of target hikes after beating FQ3 estimates, reporting strong margins, and issuing healthy FQ4 guidance. RF component peers Skyworks (SWKS +1.6%), RF Micro (RFMD +4.5%), and TriQuint (TQNT +5.2%) are also higher.
- "We believe Street continues to under-appreciate this self-help story where mgmt has a proven record of cutting costs, paying down debt, and executing on multiple secular growth cycles," says BofA/Merrill. Its FY14 and FY15 EPS forecasts have respectively been raised by 20% and 25%.
- Credit Suisse: "Avago's leverage to structural growth drivers including content increases in the Industrials/autos end-mkts and accelerating demand for bandwidth, as well as, product cycles (4G/LTE wireless ramps at Apple and China) should allow the company to outperform peers." The diversification provided by the LSI deal is seen providing "further stability."
- Morgan Stanley expresses "high conviction in management's ability to execute on driving LSI's [operating margin] from 17% to 30% over the next few years," given Avago has doubled its op. margin to 30% since its 2005 LBO.
- On the CC (transcript), CEO Hock Tan mentioned wireless sales are expected to rise over 60% Q/Q thanks to "the ramp of a new phone model and a North American smartphone customer" (a clear iPhone 6 reference). Demand for FBAR filters and related products in 4G phones remains strong.
- Wired infrastructure is expected to grow at a low-single digit rate (switch/router ASIC growth offsetting flat optical component demand), and enterprise storage is expected to see mid-single digit growth excluding the PLX acquisition.
Mon, Aug. 18, 4:06 PM
- An unnamed tier-1 automotive supplier is using Skyworks' (SWKS -0.2%) chips in wireless control systems "ramping across several leading car manufacturers." (PR)
- Skyworks notes the control system "enables drivers to remotely activate garage door openers, entry door locks, home lighting, security systems and entry gates." The chipmaker adds its analog and RF ICs have been designed into GM, Toyota, Fiat, and Chrysler vehicles.
- Though best known for its mobile offerings, Skyworks' efforts in other markets have been drawing more attention lately. Following its FQ3 report, multiple analysts cited the company's growth opportunities in non-mobile markets (e.g. automotive, industrial, smart grid, medical) as a positive catalyst.
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