Personally, it seems to me SWKS fell out of favor here more because of the nature of the company rather than because of its potential as an investment.
SWKS has a difficult to understand and boring product. Compare to some of the other companies which have been talked about for a long time this year:
LGIH - We all know what a house is and why someone would buy one.
AMZN - We all either buy from them or know someone who does.
SKX - We all wear shoes and know what feels good on our feet.
BOFI - We all use banks and most of know how a loan works.
AAPL - We all either use or are familiar with their products.
SWKS - Umm ... how do analog IC chips effect me?
Another big difference between SWKS and most of the products here is that they never sell direct to consumers. They are a “second tier” product and will, as Saul noted, never be the master of their own fate.
This can be seen as either a good or a bad thing depending on your investment philosophy. If I had Saul’s skill in investing I may not care for this. I do not. So instead I view this as a good type of company to invest in.
I have no clue which companies will sell the most cell phones.
I have no clue which companies will sell the most IoT products.
… BUT …
I see both cell phones and IoT products in ever increasing numbers.
I see the importance of wireless communication increasing every year.
I see the complexity of wireless communication increasing every year.
SWKS may not be a master of their own fate but they create a component critical to these trends. Personally, I like this.
However, even if I am right about the trends and right that SWKS is a company poised to take advantage of these trends, the timeline for showing profit on these trends is at best uncertain because their own future profits can only be evaluated in terms of the future profits of other companies. A guessing game based on results of another guessing game? Sounds difficult at best.
Even ignoring that uncertainty, the boring and hard to understand nature of their products means we will probably never see the stock price significantly over-valued (high P/E). Easy to get excited about a new iPhone. Not so easy to get excited about a new frequency filter.
Something else I see a lot of, including in myself: When excited about a company it is easy to gloss over their faults. When not so excited by a company it is equally easy to enhance their faults. I see a lot of this happening in the discussions of SWKS over the course of this year.
That is my view. I may be wrong. For now I am happy to hold on to SWKS as one of my larger positions.