Skyworks Solutions Inc. (SWKS-Q)

He doesn't understand it nor why people are selling it, despite their Apple deal. Sellers will regret selling it.

Yesterday, this chipmaker and great 5G play closed their Silicon Labs deal. The current chip shortage is especially dire in the car industry. So this deal will expand their footprint in cars, data centres and consumer markets. For years, the knock on SWKS was that it was levered to cell phones, but this deal demolishes that image.

An essential 5G play They make cell phone components and are a a huge supplier to Apple. Share have more than doubled since last March, but is pulling back a bit. A buying opportunity now.

(Top Pick Dec 10/15, Down 5.62%) It is now a potential takeout in the hot semiconductor arena.

He sees a phenomenal company. They are earning a good rate of return while putting money back in the company. ROE is 27%. The valuation looks reasonable.

(A Top Pick Sept 22/15. Down 17.72%.) This is a very innovative company doing radiofrequency chips for smart phones. It suffered along with Apple (AAPL-Q). It has a lot of cash and he doesn’t think the smart phone cycle is over. He still really likes this.

Semiconductors is a very clear leader in this market, but we are in the kind of market where there are a lot of stocks that are doing well and a lot of stocks that are doing poorly. He likes that this company is selling into hand works and automotive, because both are growing. As a replacement, he would use Broadcom (AVGO-Q). (See Top Picks.)

It has not performed well over the last while. He prefers a company line NVDA-Q where they are in the middle of graphics on the internet. It is higher margin product that SWKS-Q.

It always traded at a high valuation. It allows one chip on one phone that works anywhere in the world. Their sales are growing despite declining smart phone sales. He targets 30% upside.