Skyworks Solutions Inc (SWKS): This Stock Is Now Headed for the Sky, Don’t Miss It

Another good reason to have Skyworks in your portfolio is its strong relationship with both Samsung and Apple Inc. (NASDAQ:AAPL). The company supplied a lot of content for the Galaxy S4 and looking forward, its relationship with Apple should be another growth driver. Skyworks supplies chips for the iPhone, the iPad, and also the iPad mini.

So, given the strong and pretty old relationship between the two, it won’t be unworldly to expect that Skyworks might find a bigger market for its chips if Apple Inc. (NASDAQ:AAPL) introduces a cheaper iPhone or a retina iPad mini. Recent reports suggest that a cheaper version of the iPhone might well be a possibility as Apple looks to provide a fillip to its slowing iPhone sales by tapping emerging markets.

Also, given the stupendous success of the iPad mini, and a retina version reported to be on the way, Skyworks can expect more fireworks courtesy its Apple account. But, as I said, Skyworks Solutions Inc (NASDAQ:SWKS) is looking to diversify its markets, and expects to benefit from diverse applications such as the Internet of Things, including connected homes, connectivity in automotive applications, lighting etc. It projects 50 billion connected devices by 2020 and so, the opportunity is indeed huge.

The company has made some moves, such as landing design wins for car infotainment systems and other applications. Hence, with the expected growth in connected devices going forward, the demand for Skyworks’ modules and radio frequency solutions should improve at a rapid pace.

The bottom line

And what does one need to pay for this growth? Well, just 9.6 times forward earnings, which is considerably below the trailing figure of 19 times. Moreover, a PEG ratio of just 0.63 suggests that the company is expected to grow at a good rate in the future. So, all in all, Skyworks Solutions Inc (NASDAQ:SWKS) is still a decent investment as it has got good growth prospects and a decent valuation.

The article This Stock Is Now Headed for the Sky, Don’t Miss It originally appeared on Fool.com and is written by Harsh Chauhan.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and China Mobile. Harsh 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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