NEW YORK (TheStreet) -- In this interview with Lindsey Bell, Stephanie Link discusses the attractiveness of Apple's suppliers. A full transcript appears below.
Investors often use Apple suppliers as a play on the Apple ecosystem. The iPhone 5 came out last Friday and people are digging into its components. The stocks of these Apple suppliers have been down since the release of the new iPhone. What's going on here?
Yeah. I mean I think that there's some concern that maybe the iPhone 5, the unit growth, is not what people had expected initially. Remember that first weekend it was only five million units. I think it's a temporary thing. I think it's a supply issue -- they can't get the products out the door fast enough. So, I think over time if you average in the September quarter and December quarter for Apple and the iPhones in general, I think you will see something like 50 to 60 million units. That is very impressive to me.
So, I think that the suppliers, particularly the ones that have not participated in the rally like a Broadcom, like a Skyworks, those are quality names that are increasing their content and their dollar per content on the iPhone. Overall, that should help revenues going forward.Lindsey Bell:
Broadcom is one that you do own. They have increased their exposure to the -- what's it mean for the bottom line? Stephanie Link:
Yeah. I think that you're looking at them not only making the combo chips, that we know. Wi-Fi and GSM, that's what they're really known for and what they're really great at. That could be something like $5 to $7 per phone of content. Then they're also now on the touchscreen too. That could be, say, $2 or $3 dollars of new revenue, new content per phone. We don't know the numbers. We're all kind of speculating but I think you're talking about low single digits. What does it mean? It means that this company continues to gain market share. It means that no matter who tries, Qualcomm tries, to make a combo chip they're not in the iPhone 5 and they probably won't be for some time because Broadcom has a superior technology. To me, that's why you want to own it. 15 percent of their revenues are tied to Apple. Another 10 percent are tied to Samsung. Those are the two big players in the smartphone space. Broadcom's stock trades at a discount to Qualcomm, so I like Broadcom. Lindsey Bell:
You like Broadcom better there. Okay. What about Intel? This stock, they're trying to get into the smartphone/mobile business, but they've been lagging. Can they be a viable competitor next year, maybe? Stephanie Link:
I would not buy Intel for their smartphone exposure at all. If it comes, that's great. If they have struggles, you want to look at the valuation. The stock has gone from $28 down to the low $20s. It now yields four percent. Everybody knows it's a PC-related company. We know it. That's why the stock has fallen so much. You've had so many downgrades. You had this love fest when it was at $28 and now you have everybody hating it at $22. I think it's actually very interesting with a four percent dividend yield. Lindsey Bell:
Would you buy it? Stephanie Link:
We'll have to see.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV