top of page
  • Writer's pictureIshfaaq Peerally

Why I'm Investing in SKYWORKS SOLUTIONS


5G is the future, there is no doubt about that. The technology will allow faster internet connections and lower latency, thus making, the internet of things a reality. However, it is not so easy to find the right company to invest in in order to win from 5G. There are 3 main companies involved with 5G:

1. Semiconductor companies such as Qualcomm $QCOM, Samsung $SMSN.L which are working on the underlying technology.

2. Companies working on the network. For example, Nokia $NOK and Ericsson $ERIC-A.ST . Carriers such as AT&T $T , Verizon $VZ , T-Mobile $TMUS and Sprint $S are also in this category along with companies building towers such as American Tower $AMT and Crown Castle $CCI

3. Companies making derived products. Apple $AAPL is the best example for this one. It is expected to launch 5G iPhones in 2020.

Many companies, however, falls in different categories. Samsung falls in all 3 categories. But among all this companies, there is one which seems to be the best, and that is Skyworks Solutions $SWKS

Skyworks Solutions is a semiconductor company making chips which acts as antennas in order to connect to the network. They currently make 3G and 4G chips. For every 4G chip that they sell, they make $18. With 5G chips, they are going to make $25/chip. How many of these chips do they sell? A LOT

They are one of the suppliers of Apple and in every iPhone, there is at least a Skyworks Solutions chip. They are also a supplier of Samsung, Huawei, Qualcomm, Amazon $AMZN and Microsoft $MSFT . But most of their revenues come from Apple, Samsung and Huawei. With the trade war, shares of Skyworks Solutions fell by more than 30%. This is an overreaction of the market since only 10% of their revenues come directly from China. Worst case scenario, they make 10% less money. I, therefore, took this opportunity to invest. Even if they lose Chinese companies as clients, they are still going to make a lot of money in the Western World. The balance sheet of the company is one of the best I know. The company has no debt at all. This is something very rare nowadays. There are only 19 companies in the S&P 500 $SPx500 without any debt and $SWKS is one of them.

Watch the full video on YouTube and Subscribe for one new video every day:

https://www.youtube.com/watch?v=VDnLCI5LXP8&list=UUPO3uUyoXSaFWG-Ldq1mqEQ

Join my private investing group on Facebook for more:

https://facebook.com/groups/IshfaaqInvesting/

3 views0 comments
bottom of page