SWKS recc

Merrill Lynch bullish on SWKS:

(Sorry, I tried to copy the link, but it did not work…you can cut and paste into your browser, though)



Skyworks Solutions

This stock has really rolled over from highs printed in the summer last year, and it could be ready for a big move higher. Skyworks Solutions Inc. (NASDAQ: SWKS) designs, develops, manufactures, and markets proprietary semiconductor products, including intellectual property worldwide.

Its product portfolio includes amplifiers, attenuators, battery chargers, circulators, DC/DC converters, demodulators, detectors, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, LED drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase shifters, phase locked loops, power dividers/combiners, receivers, switches, synthesizers, technical ceramics, VCOS/synthesizers and voltage regulators.

The company posted very solid fourth quarter numbers, with sales up 15% and earnings up a stunning 27% year over year. While the low demand for the iPhone 6s did trim the first quarter outlook, the analysts are very positive on the stock as the iPhone 7 cycle begins. In fact, they expect the company to gain 10% to 15% higher content versus the last generation phone.

The $85 Merrill Lynch price target is lower than the consensus target of $90.74. Shares closed most recently at $71.02.

With most of the Apple slowdown long since priced into these top companies, investors with an eye toward the second half of 2016 could be in a sweet spot now, as the stocks still have big upside to the Merrill Lynch targets.

By Lee Jackson

alpha (a lurker, long SWKS)