NEW YORK (TheStreet) -- Shares of Skyworks Solutions (SWKS) were falling 0.2% to $103.82 Wednesday after the analog semiconductor manufacturer announced a line of new ceramic-based filters targeting high-frequency applications.
The new filters are compact, offering improved power handling, and can support frequencies up to 7 GHz. The new solutions are completely customizable to meet more demanding architectures, according to the company.
"Skyworks is pleased to be expanding our portfolio of ceramic-based filters to address customer demands and market needs," Mark A. Wolf, vice president and general manager of Skyworks' Trans-Tech division, said in a statement. "As the world leader in technically advanced ceramics, our new high frequency solutions reduce board space, deliver higher power and are manufactured using the highest quality and most consistently reproducible components available today."
Insight from TheStreet's Research Team:
Strong performance by the semiconductor group is a great sign of health for markets. Skyworks Solutions (SWKS:Nasdaq) is one of the best performing names in the group, and after a nice consolidation, it appears ready for a breakout.
After reaching all-time highs in late March (at which point the stock was up about 45% year-to-date), it was time for a cooling off period. Volume trends came in as the stock worked sideways within a range but higher than the huge volume day (circled). This is meaningful consolidation.
A Moving Average Convergence Divergence buy signal triggered last week on some decent turnover, and the momentum indicators are now overbought. That is not necessarily a sell signal.
The action on May 18 is constructive and notable as the breakout puts Skyworks in record territory once again. We like seeing a breakout on higher volume. This tells us institutions are buying into the name. In fact, we see the stock above the upper Bollinger band, and a "fat tail" trade may exist on a couple higher closes.
The trend line is still intact, and while we could see a pullback soon, there is certainly more upside to be seen.
See more analysis on SWKS in Bob Lang's video.
DISCLOSURE: Trifecta Stocks has no position in SWKS. This Alert is a technical analysis of the company's chart, and we are not taking any action at this time. Separately, TheStreet'sGrowth Seeker portfolio, which is managed by Bryan Ashenberg, is long SWKS.
Separately, TheStreet Ratings team rates SKYWORKS SOLUTIONS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SKYWORKS SOLUTIONS INC (SWKS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SWKS's very impressive revenue growth greatly exceeded the industry average of 0.0%. Since the same quarter one year prior, revenues leaped by 58.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SWKS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.46, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SKYWORKS SOLUTIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 112.50% and other important driving factors, this stock has surged by 134.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SWKS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SKYWORKS SOLUTIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SKYWORKS SOLUTIONS INC increased its bottom line by earning $2.37 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($5.12 versus $2.37).
- You can view the full analysis from the report here: SWKS Ratings Report