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A Stake in the Internet of Things Tsunami – Three Gurus Buy Skyworks

December 15, 2013 | About:
Sally Jones

Sally Jones

49 followers
With key customers like Sony, Motorola, Cisco, Google, HP, Apple and many others, Skyworks Solutions’ semiconductors are in just about everything related to the Internet of Things Tsunami, a phrase that was coined by the Skyworks president and CEO David Aldrich and caught on like wild fire across the technology industry. As of the third quarter of 2013, three billionaire investors, Chuck Royce, Steven Cohen and Scott Black, made new buys of SWKS. Royce sold out in 2009 and the SWKS price has more than doubled since that time.

With world-class manufacturing capabilities and scale, Skyworks Solutions has a reputation as a true innovator of high performance analog semiconductors, making miniature electronics for numerous cutting edge applications, such as talking cars, smartphones and the latest satellites.

In fiscal year 2013, Skyworks reported revenue of $1.79 billion, with operating income of $457 million (non-GAAP), and total assets of $2.33 billion, as of November 2013. The company reported financial results for its fourth fiscal quarter for the period ending September 27, 2013 with revenue of $477 million, an increase of 13.3% over the same quarter a year ago. Operating income was $105.5 million (GAAP) and earnings were $0.44 per diluted share.

Skyworks president and CEO David Aldrich commented in a company press release: “Skyworks continues to outperform as we expand our diversified market footprint, gain content with customized analog solutions and capitalize on global demand for the Internet of Things…We are effectively executing our strategy to deliver the growth of connectivity along with analog semiconductor financial returns. Based on our product innovation, proprietary solutions and track record of operational execution, we’ve created a differentiated business model. As a result, we are well positioned for sustainable above-market growth and shareholder value creation.”

Skyworks Solutions Inc. (SWKS)

Up 32% over 12 months, Skyworks Solutions Inc. has a market cap of $5.15 billion; its shares were traded at around $27.32 with a P/E ratio of 18.90 and a P/B ratio of 2.44. The company does not pay a dividend.

Headquartered in Woburn, Massachusetts, Skyworks Solutions Inc. (SWKS) makes semiconductors for a wide range of applications in automotive, broadband, wireless infrastructure, energy management, GPS, industrial, medical, military, wireless networking, smartphone and tablet applications. The company's portfolio includes amplifiers, attenuators, circulators, demodulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure RF subsystems, isolators, lighting and display solutions, mixers, modulators. Skyworks also makes optocouplers, optoisolators, phase shifters, PLLs/synthesizers/VCOs, power dividers/combiners, power management devices, receivers, switches and technical ceramics.

GuruFocus currently ranks SWKS one star out of five stars for business predictability.

Tracking historical share price, revenue and net income:

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Guru Action: As of Sept. 30, 2013, three gurus made new buys of SWKS and there is insider selling.

As of Sept. 30, 2013, Pioneer Investments reduced its position by 1.85%, selling 28,718 shares at an average price of $24.29 per share, gaining 12.5%. The firm has gained 18% buying 1,550,900 shares at an average price of $23.20 per share. Selling, the firm gained 12% on 28,718 shares at an average price of $24.29 per share.

Also in the third quarter of 2013, top guru stakeholder Manning & Napier Advisors reduced its position by 1.99%. The firm’s current shares are 3,456,270 or 1.84% of shares outstanding.

Chuck Royce last sold out SWKS in the fourth quarter of 2009, selling 1,114,600 shares at an average price of $12.47 per share, gaining 119.1%. In the third quarter of 2013, he made a new buy of 57,300 shares at an average price of $24.29 per share, gaining 12.5%.

Steven Cohen last sold out SWKS in the first quarter of 2013, selling 40,379 shares at an average price of $21.96 per share, gaining 24.4%. As of Sept. 30, 2013, he made a new buy of 53,706 shares at an average price of $24.29 per share, gaining 12.5%.

Use the GuruFocus Value Screen to find 52-Week Lows and discover potentially deep value stocks held by billionaire Guru investors.

GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.0/5 (2 votes)

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