Thus, as Marvell Technology Group Ltd. (NASDAQ:MRVL) continues to develop proprietary technologies, it is expected to realize better gross profits, perhaps better than the industry as a whole. Profit margins, too, should remain better than those of its peers. (see ratios)
For that reason, I look for Marvell Technology Group Ltd. (NASDAQ:MRVL) shares to perform well over the coming year. It should remain at the forefront of broadening product markets. Be aware of the risk of deriving more than 20% of sales from one customer, Western Digital Corp (NASDAQ:WDC). The stock’s forward P/E is 13.
Foothold in rapidly-growing markets
Skyworks Solutions Inc (NASDAQ:SWKS) offers high-performance analog semiconductors to a wire range of end markets. Currently, it is focused on providing solutions for the smartphone, tablet, smart energy, power management, and “machine to machine” sectors.
The most notable aspect of this company is its ongoing strong upturn in earnings per share, on a year-over-year basis. In particular, June-quarter earnings climbed 20%.
Product launches aimed at the mobile internet market should help boost results going forward. For instance, Skyworks Solutions Inc (NASDAQ:SWKS) is gaining design wins for enterprise routers, backlighting, and power management products, and other chips, serving the telecom equipment, portable device, and automotive sectors, among others.
In all, Skyworks Solutions Inc (NASDAQ:SWKS) is well positioned to capitalize on opportunities in expanding product markets. Its margins are expanding substantially as revenue gains ground.
I look for Skyworks Solutions Inc (NASDAQ:SWKS)’ sales to continue to increase at a rapid, likely double-digit percentage on an annual basis, driving profit gains in fiscal years 2013 (ends in September), 2014, and beyond. Indeed, its profit growth rate may well continue to outpace the broader semiconductor industry.
The shares are trading at a forward P/E of 9.3. Given the subdued valuation, they offer upside for aggressive investors.
Summary
All of these semiconductor makers are seeking to boost their presence in higher-growth sectors. In light of the likely further adoption of advanced technologies by a wider range of customers, they may well be good investments. I suggest risk-tolerant investors buy at least one of the three for their portfolios, in light of the stocks’ appealing valuations at this juncture and the companies’ solid earnings growth prospects.
The article 3 Semiconductor Stocks for You to Consider originally appeared on Fool.com and is written by Damon Churchwell.
Damon Churchwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Damon is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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