Shares of radio chip maker Skyworks Solutions
The fateful downgrade pointed to stronger competition from rivals RF Micro Devices
Returning fire, Skyworks CFO Don Palette underscored his earlier guidance numbers with this stern admonition: "Skyworks' core business continues to outperform our addressed markets and we believe this will be clearly reflected in our performance and guidance. To be clear, our revenue and non-GAAP earnings outlook for both the June and September quarters is before we add the accretive SiGe and Advanced Analogic Technologies acquisitions." In other words, the actual results should be even better when you add in the contributions from two recent acquisitions.
Cantor Fitzgerald's brand-new buy recommendation on the stock is an opportunistic move, designed to take advantage of a suddenly cheap stock with solid growth prospects. "We suggest that investors aggressively accumulate shares at current levels," said Cantor analyst Dale Pfau. Concerns over Skyworks' market share are "overdone," in his opinion.
At the same time, Pfau opened a can of "buy this" on RF Micro and TriQuint Semiconductor
Both TriQuint and Skyworks say they're taking market share from each other these days, so it's not surprising to see analysts jumping to wildly different conclusions. My view is that RF Micro Devices is worth more than its bargain-basement P/E ratio would indicate, and that the company isn't given enough credit for how it removed itself from a toxic Nokia dependency. Skyworks and TriQuint are fine stocks in their own right, but neither one can hold a candle to RF Micro's value right now.
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of TriQuint and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.