SWKS raises estimates

In response to the warning by fellow chip maker Microchip that tanked the chip market, Skyworks just raised their 4th quarter estimates from $1.00 to $1.08. Analyst estimates were $1.01. And I’m sure, if they raised to $1.08, they expect to beat it.

Last year they made 67 cents. So $1.08 would be up 61%. Earnings will be in a range of $3.50 for the year, up 50% for the year, and with a price of $45 yesterday, that’s a PE of about 13. Now, Mauser may consider that a risky, high PE stock, but that’s my kind of stock.

Saul

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Last year they made 67 cents. So $1.08 would be up 61%. Earnings will be in a range of $3.50 for the year, up 50% for the year, and with a price of $45 yesterday, that’s a PE of about 13. Now, Mauser may consider that a risky, high PE stock, but that’s my kind of stock.

Yes this is another example of where looking at relative value can be useful. AMBA was valued higher and SWKS and SYNA were valued lower. This relative market prices changed radically in the past several weeks. I sold off 1/3 of AMBA at $42/43 and bought more SYNA and SWKS. In fact, nothing had changed with any of these three companies and all 3 make or develop semiconductor components for electronic devices. In the past several days AMBA has also sold off bu the opportunity was there for about a week. Sure, AMBA could outperform the others in the coming years. Again, I wasn’t suggesting an all or none response. My response was to sell 1/3 of my AMBA and buy stocks that in my opinion had tanked for no good reason.

Chris

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My response was to sell 1/3 of my AMBA and buy stocks that in my opinion had tanked for no good reason.

Hi Chris, I also sold AMBA to buy others that had gone down a bunch, while AMBA had gone straight up for weeks and stayed there on what I felt was GoPro hype.

Best,

Saul