Mirror Mirror on the Wall, Is Skyworks Solutions Inc (SWKS) the Perfect Stock? – RF Micro Devices, Inc. (RFMD), TriQuint Semiconductor (TQNT)

RF Micro Devices, Inc. (NASDAQ:RFMD), a major player in radio frequency power management, recently expanded its portfolio of multimode multi-band power amplifiers. The company anticipates significant gains from this recent portfolio deployment aiming to leverage its leadership in the space. Nevertheless, fundamentally, RF Micro Devices is in a not so good shape. Low margins and a revenue roller coaster do not translate into a lucrative investment opportunity.

For the last three months of 2012, the company experienced strong top-line performance supported by solid demand for its cellular products group (CPG), and multi-market products group (MPG) segments. But, for the quarter ahead, revenue is estimated to decrease by approximately 6-8% sequentially.

Risks

QUALCOMM, Inc. (NASDAQ:QCOM) rocked the wireless technology boat when it unveiled plans to introduce its own radio frequency chip. Qualcomm’s new chipset, which supports seven cellular radio technologies, pretty much makes the current frequency components obsolete.

Evidently, competition is heating up in an already overcrowded market. Nonetheless, analysts seem to believe that Skyworks is perfectly capable of surviving a possible onslaught from Qualcomm. Out of twenty analysts tracked by Wall Street Journal, fourteen urge investors to buy the stock while two indicate an “outperform” rating.

Bottom line

Some may think that the perfect stock is hard to come by, if not impossible. After all, perfection is by definition, a state of the impossible. However, the more you seek for an investment utopia, the closer you get to it.

Skyworks might not be by all means the perfect stock, but it has certain qualities that underlie a huge opportunity. With comparably favorable attractive valuations and 5-year expected EPS growth greater than 15%, I cannot find a reason not to consider initiating a position in this stock.

The article Mirror Mirror on the Wall, Is Skyworks the Perfect Stock? originally appeared on Fool.com and is written by Fani Kelesidou.

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