Nice rally in $SWKS – Skyworks solutions – up 30% since tweeted this name back in November last year…..
Take some profit today if you have not done so already – results out today. Don’t anticpate anything bad in their number but given the run up in the stock maybe wise to take some profit.
Keep a core position – this stock is not expensive!
2CentView has as core position in $SWKS after taking the trading profit at 76,
$MU after being whacked down to 28 in October as recovered 23% to test the all time high of around $35.
FV on $MU = $40 – so if it can break $35 it could start testing the FV level.
Implied 5Y growth at 34.5 in $MU is only around 4% – so market does not place a high growth multiple on this stock – mainly due to the commodity nature of memory chips and the ability of competitors increasing supply so reducing the scope of maintaining or increasing margins. However, the supply chain is much better controlled now following industry consolidation.
Hold if like $MU and think the stock can break through the $35 level or take some profit to reduce your cost basis if you got in around $30, looking to add to the position on a pull back.
2CentView has sold it’s position in $MU at 34.25 and using the profit to invest in $SWKS (Skyworks), which has more growth potential – but slightly more risky. However, still like $MU but can’t have both!
SWKS – Skyworks solutions has an impressive product line and their technology is used in wireless, collision avoidance and go pro cameras – below is from their last conference call transcript:
"And our Q4 design wins highlight the success we’ve had in addressing this new opportunities. Some of these include: multiple diversity receive module wins at a Tier 1 smartphone manufacturer; analog control ICs for GoPro for action video cameras; connectivity module supporting multiple Smartwatch platforms; custom front end solutions for streaming music platforms at Sonos and other leading wireless speaker providers; a suite of devices supporting Netgear’s latest X6 Tri-band Gigabit router; dedicated short range communications, vehicle-to-vehicle solutions for GM’s platforms; and finally, custom ASICs for Rockwell Collins’ avionics platforms."
FV=64 which assumes 5Y growth around 10% – but the stock has potential to grow at 15% over the next 5 years (=$80). The company is also buying back stock and has good free cashflow generation.
Individual hot stocks like GoPro and MobileEye are expensive – so a cheaper way and less risky way to get exposure to these growth markets is via SWKS – returns will be lower but so is the risk.
Trade: Buy here at 62 take profit target 80, Stop 50.
2CentView has as trading position in SWKS opened at 61.