Even in the grip of a deep recession,
sales, profits and cash flows all set
new records for this little-known tech
company. While revenues advanced +16%
last year, earnings rose at three times
that pace, climbing +48% to hit $0.71
per share. Which one was it?
A.) NaviSite, Inc. (NAVI)
B.) Agilsys, Inc. (AGYS)
C.) ATS Corporation (ATCT.OB)
D.)
Skyworks Solutions (SWKS)
E.) Elron Electronic Industries, Ltd.
(ELRN) |
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Published: October 8, 2009
The
correct answer is
(D.) Skyworks Solutions (Nasdaq:
SWKS)
Skyworks is a leading provider of
semiconductors that facilitate
mobile connectivity. The firm's
primary market is handset power
amplifiers (PA) and front-end
modules (FEM), which are used to
strengthen and filter voice and data
signals from cell phone towers.
Consumers around the world are
increasingly gravitating to iPhones
and Blackberries -- both of which
feature high-performance Skyworks
chips, and the sale of every device
represents cash in Skyworks' pocket.
The company's PA and FEM shipments
have been growing at an impressive
+34% annualized rate during the past
five years, outstripping the overall
industry and capturing additional
market share. According to Strategy
Analytics, it leapfrogged rival RF
Micro Devices (Nasdaq: RFMD) earlier
this year and currently controls
about 40% of the worldwide market.
That's why Smartphone sales climbed
nearly +30% last quarter and will
approach 200 million units this
year. Some forecasts call for
penetration rates (as a percentage
of all handsets) to triple from less
than 20% to as much as 60% in the
next five years. Not only are
shipments to key smartphone
customers doubling, but the company
might net $3 to $6 from each handset
instead of the $1 it pocketed from a
2G phone.
To boot, the installation of over
150 million automated smart meters
during the next five years will lead
to $2 billion in annual chip sales
that don't exist today, and Skyworks
is an emerging leader in this
nascent field. The company has also
diversified its product lineup by
adding a broad catalog of analog
equipment used in a variety of
applications. Skyworks has several
competitors in its core markets, but
its team of 500 talented engineers
has designed patent-protected
products that are tiny, inexpensive,
and energy-efficient -- three
attributes that handset makers love.
That's why StreetAuthority editors
Paul Tracy and Nathan Slaughter
offer an in-depth look at Smartworks
and other in the latest issue of
their Market Advisor
newsletter. Not only does the
company offer incredible
opportunities for great
fundamentals, it's what Paul and
Nathan dub a "category killer"--a
company poised to dominate its
industry for years to come.
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