Skyworks Solutions Inc. (NASDAQ:SWKS) is back in my scopes today. Skyworks with its market capitalization of $21.14B is strongly connected to the huge possibilities inherent in the Internet of All Things (IoT). Skyworks is engaged in the production of analog semiconductors. The Company supports automotive, broadband, cellular infrastructure, energy management, Global Positioning System (GPS), industrial, medical, military, wireless networking, smartphone and tablet applications.
Previous Coverage on SWKS Options
I last wrote about trading SWKS options on March 11 in a post titled, “Buy SWKS Options in Advance of Impressive Q2 Earnings“. In that post, I talked about how Skyworks had delivered impressive outperformance on a previous coverage from 2014.
I talked about the stock unrelenting bullish momentum. I also made the bullish case for Skyworks based on its consistent earnings and revenues beat in the previous four quarters. I went ahead to say that Skyworks had impressive potential ahead if the demand for Apple’s iPhone 6 and Samsung’s Galaxy S6 and S6 Edge continues. I completed that piece by recommending that you buy the SWKS May 2015 95.000 call.
When I wrote that piece in March, the shares of Skyworks were trading around $91.20. I recommended that May call because I knew they will deliver outstanding results when Skyworks posted Q2 earnings on April 20.
Skyworks did post an impressive second quarter result and the options delivered about 110% in gains. The stock is trading around $110.52 this morning to mark an appreciation of 22.28% from March 11.
New SWKS Coverage
Skyworks is set to deliver its third quarter (Q3 2015) results on July 15 and I believe that it is smart to take up strategic positions with SWKS call options now. The shares of Skyworks have delivered impressive share price appreciation in the recent past. For instance, the stock has gained 126.9% in the last one year. It has gained 50.58% in the year-to-date period. It has gained 7.29% in the last 3 months and it has gained 4.58% in the last one month.
The fundamentals of its bullish momentum are still in place inasmuch as the demand for the devices that uses its semiconductors is maintained. I am most impressed with Skyworks’ diversified business fronts. The company sells connectivity chips for personal computers, Smartphones, and the IoT market. Interestingly, Skyworks expects its total addressable (TAM) market for PCs to reach $1B by 2020. Its TAM for smartphones is expected to reach $2B by 2020. Its TAM for IoT is expected to reach a massive $43B in the next five years.
I am optimistic about the prospects of Skyworks and I recommend buying SWKS call options. You’ll do well to consider buy the SWKS Nov 2015 110.000 call (SWKS151120C00110000) at an asking price of $10.41.
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