Ed Snyder Skyworks Solutions Inc. SWKS-Q TOP PICK Jul 11, 2008

Just bought it. Trades at 12x PE with an 11% free cash flow yield. They make cell phone chips (i.e iPhones), but only 2% exposure to China. SWKS has strong inventory management, so she bought it. Growth lies in growing demand for ever-more complex chips.

SWKS got a big push with the potential of 5G technology. 
It is down 8% in a year and up 24% in 2023. Relatively speaking, this is not so bad for a tech company. 
The balance sheet is strong and it is priced well at 12X earnings. 
Growth (EPS) should be in the 15% plus range over the next two years. 
The last quarter matched estimates but of course in this market investors are always looking for 'more'. 
The main issue here has been the decline in smartphone sales. 
There was a glut of inventory, and as this gets worked down we would expect better things from SKWS. 
That being said, a recession is not going to help sales. 
We think it is OK and worth holding. 
The combination of valuation, balance sheet and potential we think is decent.  
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Has huge exposure to smartphones and the internet of things. When it reported a few weeks ago, the quarter was solid, though guidance light due to lightness in smartphones. Has pulled back to now trades at a cheap 12x PE estimates. Pays a 2.4% yield. Shares are up 12% for the year.

Just bought Skyworks and Alibaba. China is a great contrary play, and BABA is cheap. Skyworks is in every smart phone in the world, and they've been re-rated 50%. They boast attractive demographics and valuation. 

After earnings, is up only 1.5% on a strong rally day. Honestly, he's disappointed by this move.

Trades at 11x earnings, $1.6 billion free cash flow, 12% free cash flow yield and no debt! But guidance was weak. Bottoming of demand is not here, but further ahead. Is up modestly today.

The sector is up 50% to date, but the revenue outlook is muddy due to the macro economy. So, he expects weaker demand for smartphones.

Good managers and Apple will place some big orders with them.

Is down 25% this week after earnings, which was overdone. They have $700 million in free cash flow which will let them buyback shares and support the stock. She's taking a breath as shares recover. Eventually, she will sell, but not after this sell-off. Pays a 4.2% dividend yield, so maybe it's interesting to enter now.