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Writer's pictureIshfaaq Peerally

Skyworks Solutions Stocks - Still Fairly Valued



🤝Skyworks Solutions $SWKS is the largest position in my portfolio. 𝙏𝙝𝙚 𝙘𝙤𝙢𝙥𝙖𝙣𝙮 𝙞𝙨 𝙢𝙖𝙠𝙞𝙣𝙜 𝙖𝙣 𝙞𝙢𝙥𝙤𝙧𝙩𝙖𝙣𝙩 𝙖𝙘𝙦𝙪𝙞𝙨𝙞𝙩𝙞𝙤𝙣, 𝙩𝙝𝙚 𝙄𝙣𝙛𝙧𝙖𝙨𝙩𝙧𝙪𝙘𝙩𝙪𝙧𝙚 𝙖𝙣𝙙 𝘼𝙪𝙩𝙤𝙢𝙤𝙩𝙞𝙫𝙚 𝘽𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙤𝙛 𝙎𝙞𝙡𝙞𝙘𝙤𝙣 𝙇𝙖𝙗𝙨 $SLAB . This will change the balance sheet of the company since they are taking debts after a long time.


🍏 I started buying shares of Skyworks Solutions in June 2019, at the time the largest position in my portfolio was Apple $AAPL which I bought in 2016 and 2018. Apple is a great company but the stock was getting expensive and I wanted to own smaller companies with lower correlations with the S&P 500 $SPX500 . Therefore, I started buying shares of Skyworks Solutions, taking profits from Apple gradually.


📱 Skyworks Solutions is one of the 𝙨𝙪𝙥𝙥𝙡𝙞𝙚𝙧𝙨 𝙤𝙛 𝘼𝙥𝙥𝙡𝙚, making RF semiconductors, necessary to connect to the network. Skyworks Solutions will play a very important role in 5G. Compared to 4G and 3G, the profits on 5G are going to be much higher.


⚠️ Recently, Apple has been ditching its suppliers, mainly Intel $INTC and Qualcomm $QCOM . Can the same thing happen with Skyworks Solutions? Unlikely, since Skyworks Solutions is a 𝙝𝙮𝙗𝙧𝙞𝙙 𝙛𝙖𝙗𝙡𝙚𝙨𝙨/𝙛𝙤𝙪𝙣𝙙𝙧𝙮 𝙘𝙤𝙢𝙥𝙖𝙣𝙮, and it will be hard to delegate these manufacturing of these semiconductors to third party manufacturers.


🚗 It is, nevertheless, important for Skyworks Solutions to diversify away from Apple and 5G into Autonomous vehicles and Internet of Things. That's why they are acquiring Infrastructure and Automotive Business of Silicon Labs.


💰 We have not seen the effects of 5G and IoT on the fundamentals of Skyworks Solutions. The best is yet to come for this company. I won't say that Skyworks Solutions is a value stock anymore like it was in 2019 but it is still fairly valued.


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Full analysis of Skyworks Solutions:


 

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