Apple chip suppliers
Skyworks Solutions (SWKS), Qorvo (QRVO), Cavium (CAVM), and Taiwan Semiconductors, four Apple (AAPL) chip suppliers, saw their share price take a hit last week on news that Apple (AAPL) will request a price break on semiconductor chips, which would negatively impact revenues of the firms in this industry. Correspondingly, the revenue estimates also need to be revised to reflect lower gross margins. The firm constitutes 0.48% of the Technology Select Sector ETF (XLK).
The stock price of Skyworks has declined by 5.60% in the last week of June. The last traded price of the firm on June 30, 2015, was $104.10, down from $110.28 on June 23, 2015. Skyworks Solutions is also trading -2.21% below its 20-day moving average of $106.45, but 1.66% and 4.1% above its 50- and 100-day moving averages of $102.36 and $97.32, respectively. This shows that although the stock is generating positive returns in the long term, it is currently in a short-term “bear” trend.
Skyworks Solutions is a fundamentally strong stock
In 2014, Skyworks Solutions generated portfolio returns of 156.33%. YTD (year-to-date), the firm’s returns are 40.20%. The stock’s trailing 12-month return is also significantly high at 118.10%, but in contrast, the one-month return is -3.59%, which again shows that it is a fundamentally strong stock and that it is seeing a bearish trend in the short term due to the above-mentioned macro factors affecting the semiconductor industry.
Out of 23 analysts covering the stock, 17 have a “buy” recommendation and six have a “hold” recommendation on Skyworks Solutions. Analysts’ stock price target for Skyworks Solutions is $114.11 with a median target estimate of $115. As a result, the company is trading at a discount of 11% with respect to its median target. It’s an attractive buy at the current levels.