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4 Buys (Yes, Buys) at 52-Week Highs


SWKS Chart

Skyworks Solutions (SWKS) is concentrated in designing, developing, manufacturing and marketing analog and mixed signal semiconductors. The company has an $8 billion market cap and trades about 3.5 million shares a day.

52 Week Range: $20.62 to $44.17

Beta: 1.62

Price to Book: 3.53

Compared to industry peers, Anadigics (ANAD), RF Micro Devices (RFMD), and TriQuint Semiconductor (TQNT), Skyworks Solutions is the highest rated by analysts. Skyworks Solutions has almost as many buy recommendations as the other three combined.

TriQuint Semiconductor's stock percentage rise beats Skyworks Solutions, but it's starting from a lower base price. Skyworks Solutions is about twice the valuation of TriQuint Semiconductor, and with $2 billion in revenue compared to slightly less than $1 billion, the valuations correlate neatly.

Skyworks began paying an annualized 44 cent dividend this month for an effective yield of 1.1%. Rising dividends (in this case the start of one) is a catalyst for dividend funds and investors to push the share price even higher as they become interested in the bull thesis. The dividend yield is smaller than Apple (AAPL), but this company doesn't need to borrow to pay it. Skyworks is also essentially debt-free.

At the same time, because you have to go back until 2001 to find a shareholder that bought at a higher price, virtually every investor who bought is happy right now. There's no one waiting for the price to move higher "just a little more" so they can get out at even, creating strong resistance levels.

Currently, the short interest based on the float is inconsequential and not a significant concern. Short interest is 2.7%.

SWKS Revenue (TTM) Chart

 

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