Skyworks Solutions (NASDAQ:SWKS) used to be a decent proxy for Apple (NASDAQ:AAPL). Apple products from iPhones to iPads ship with scores of Skyworks radio chips inside. Foxconn, Cupertino's manufacturing partner, accounted for 27% of Skyworks' revenue in 2011 and 29% in 2012. It's no wonder that the two stock charts stuck together like meatballs and potatoes as Cupertino's mobile strategy took shape.
But a funny thing happened in 2013. Skyworks shares have largely detached from Apple and started treading their own path. So far this year, Apple investors are down 20%, while Skyworks tracked close to the S&P 500's (SNPINDEX:^GSPC) 18% return.
Skyworks underscored this newfound independence with its third-quarter earnings report on Thursday night. The quarter itself wasn't spectacular -- Skyworks largely met analyst expectations on both the top and bottom lines -- but the company sees a strong second half to the 2013 calendar year. "We have good visibility for December because a number of phones and smartphones and tablets in that segment of our business, you will be seeing new platforms hitting the market," said CEO David Aldrich. "We think the market will be up in December. We think we'll be up more than the market, and we can identify those programs today."
Skyworks shares responded with a 6.4% surge in Friday trading, but investors didn't take Aldrich's comments as good news for Apple. Cupertino's shares sagged 1.6% on Friday, setting the stage for a gloomy Apple report next week. Skyworks can get by just fine without Apple propping the company up, particularly since global smartphone leader Samsung has become a more important component of Skyworks' sales.
This company prides itself on making custom solutions for every client, often delivering single chips to perform the functions of multiple rival processors. That's how you land massive customers like Samsung and Apple, and why I believe that Skyworks will remain at the helm of the mobile revolution no matter which company owns the next era of handsets, tablets, wristwatches, or connected tooth fillings. There's always a place for top-shelf components, and Skyworks knows how to step up to customer demands.
Don't just take my word for it. Your fellow investors generally agree with my bullish CAPScall on this stock, giving Skyworks a perfect five-star rating out of five. All-star CAPS player zk116 describes Skyworks' promise this way (and I agree): "It is always hard to say if this is the bottom, but I believe earnings will force the stock upward over time."
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