6/12/2015
By Dominique Paul

When Apple Inc. (AAPL) experiences sales growth, companies in its supply chain benefit.

P2P Peer-to-Peer Analysis

In the specific report below, we looked into semiconductor companies known to be in business with one of our favorite tech giants, Apple Inc. (AAPL). Apple seeks the most innovative vendors to supply the components of its latest devices quickly consumed by the general public all around the world.

It only makes sense that when Apple sees higher sales for its products, its top suppliers would also reap in some benefits, making them great targets for potential investors looking for the next big move.

Understanding P2P

When performing a Peer-to-Peer (P2P) analysis, looking to understand the company’s financial health is an obvious goal, but there is so much more to it. We’re search for weaknesses that are specific to particular industries. By looking deeper than top and bottom line growth, we’re able to tell what companies are becoming true forces to be reckoned with in their fields.

What’s Intriguing Now

Avago Technologies (AVGO) Based off triple digit revenue growth in the most recent quarter, the company is stealing market share in the industry. It’s seeing the greatest strength in its wired infrastructure segment which is up 74% year-over-year. The company is focused on its products and services being innovative and selling themselves and has invested 2x more in its R&D (Research and Development) department than in its SG&A (Selling, General and Administrative)department for the quarter. Operating margin rose significantly by 307 bps, however, profit margin did decrease by 122 basis points despite the company increasing its net income by 117%.

Skyworks Solutions (SWKS). The company has been seeing EPS trends move higher across the board from the original estimates placed three months ago. SWKS is expanding both top and bottom line and seeing expansion in its operating and profit margins. The amount of investments contributed to R&D rose by 8% which is a good sign, however, it is a significantly smaller increase compared to its peers below.

Linear Technology (LLTC). The stock trades in a narrow range and the company has beat 3 out of 4 quarters, with the last two showing lower single digit surprises. EPS trends are mixed with the next fiscal quarter & year being flat, while the current fiscal quarter ticked slightly lower by $0.01, the current fiscal year estimate grew by $0.02. LLTC has been expanding its margins with the operating margin increasing by 48 basis points to 46.65% and profit margin rising by 254 basis points to 36.33%. Also, with such a small market cap, the company could be a potential take-over target for an industry giant.

Peer-to-Peer for Most Resent Quarter Filed With SEC

Two Year Chart Below:

Dominique Paul
Wall Street Strategies

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