Something I’ve been contemplating lately, I’m curious to get input from others here: Maybe I’m totally off base with this, but it seems to me as if most people are asking the wrong questions when looking at Skyworks. Or perhaps not so much the wrong questions as questions that are too complex.
Analysts look at Skyworks and see an Apple supplier. They are concerned Apple’s poor performance projections will equate directly to poor performance for Skyworks. Fair enough. Apple used to be the source of the majority of income for Skyworks not so long ago and still is their largest customer.
A lot of individual investors, including on this board, see the opportunities for Skyworks to grow into Android phones and IoT devices. Opportunity for high growth is expected. Fair enough. This is, after all, the strategy Skyworks management has been pursuing in recent years.
Yet all this seems to me overly complicated when there is a very simple question that can be considered from both viewpoints:
Is Skyworks just an Apple supplier, or has Apple become just another customer of Skyworks?
What this means for me…
Thinking on this for my personal situation, I can only see this as a good position for me as an investor to matter what happens.
It seems to me we are at an inflection point where everyone (market, analysts, individuals, etc.) is balanced out, uncertain how to classify Skyworks in my question above.
What if Skyworks is still just an Apple supplier? Well, then my money is probably in a relatively safe location with minimal down side from the price today because Skyworks’ performance will somewhat match that of Apple, a large and relatively stable company. (Side note: I couldn’t care less about the price 12 months ago which a lot of people bring up). Meanwhile, there is still a possibility to transition to the second scenario…
What if Skyworks has been successful in their diversification and Apple is just another customer? Well, then my money is also in relatively safe location because because the current Skyworks price does not reflect a diverse and growing customer base, meaning I got into this investment with excellent timing.
Looking at SWKS from this perspective, I really have a hard time seeing anything but good news for my personal investment.