Skyworks Solutions Inc. (SWKS)

Transcription

1 September 22, 2016 Skyworks Solutions Inc. (SWKS) Margaret Snyder Max Smith U.S. Economist Socially Responsible Investing Analyst

2 Table of Contents Investment Thesis Brief History Company Overview Industry Overview Company Performance Valuation SWOT Analysis Recommendation

3 Investment Thesis The 12-month decrease of 12.66% has created a value opportunity The stock has been unfairly punished for its association with Apple and Samsung Positioned to capitalize on growth of Internet of Things Extensive product portfolio Shifting focus to higher value added solutions Increasing profitability and revenue 2

4 Skyworks Solutions History Headquartered in Woburn, Massachusetts Founded in 1962 as Alpha Industries Merged with the wireless communications division of Conexant in

5 Skyworks Solutions Overview Connecting Everyone and Everything, All the Time Provide increased connectivity for a wide range of applications Diverse product portfolio Intellectual property Global scale Sales and service facilities throughout Asia, Europe, and North America Deliver more than 5 billion units to customers each year 4

6 Skyworks Solutions Strategic Geographic Placement source:investor presentation 5

7 Customers 6

8 Senior Management David J. Aldrich Executive Chairman May 2016 CEO President and CEO of Alpha Industries since 2000 Source: Skyworks Investor Relations Kris Senneseal CFO - August Years of international finance experience Liam Griffin CEO - May 2016 President - May 2014 Joined Skyworks in

9 Recent News August 29 - Skyworks Appoints Kris Sennesael Chief Financial Officer August 3 - Skyworks Acquires Remaining Interest in Filter Joint Venture with Panasonic July 21 - Skyworks Announces Increase in Quarterly Dividend and New $400 Million Stock Repurchase Program July 21 - Skyworks Exceeds Q3 FY16 Expectations Source: Skyworks Press Releases 8

10 Industry Overview Market Cap: $1.00T Cyclical Follows the end-market demand for personal computers, cell phones, and other electronic equipment Source: Fidelity 9

11 Industry Growth For Internet of Things

12 Industry Overview Developments in this industry determine the way we work, transport ourselves, communicate, entertain ourselves, and respond to our environment More than 65% of the global population will use smartphones by 2020 with emerging markets leading the growth During Q the number of smartphone subscriptions will surpass those for basic phones Streaming data is expected to grow at a 57% compounded growth rate through

13 Information Technology and Interest Rates

14 Internet of Things Everyday objects have network connectivity Forecasted to surpass mobile phones as the largest category of connected devices in 2018 Internet of Things is forecasted to include billion devices by 2020 Serviceable market for Skyworks of approximately $10 billion over the next two to three years With their large product portfolio, their parts can be used for many applications 11

15 Internet of Things Source: Skyworks Corporate Brochure 12

16 Internet of Things - Current Uses 13

17 Stock 12 Month Performance Source: Yahoo! Finance 14

18 Research and Development SKWS invested $303.2 million, $252.2 million and $226.3 million in research and development activities during fiscal 2015, fiscal 2014 and fiscal 2013, respectively. The increase in research and development expenses in fiscal 2015 and fiscal 2014 as compared to fiscal 2013 were the result of increases in internal product designs and product development activity for their target markets. These integrated circuit design, investment in advanced semiconductor manufacturing processes, development of new packaging and test capabilities and research on next generation technologies and product opportunities. Source: Annual Report 15

19 Revenue by Market Source: Investor Presentation 16

20 Company Performance Source: Investor Presentation 17

21 Financial Growth 18

22 Dividend History 19

23 Profitability Analysis 20

24 Competitors Ratio SWKS NVDA TXN Sector P/E P/S P/B P/CF ROA% ROE%

25 Competitors 22

26 DCF Model 23

27 Socially Responsible Impact Factory Improvements Water Conservation Improvement Energy Reduction Hazardous Waste Avoidance Decrease in Recorded Injuries Employee Ethics Training Requirements (for suppliers as well) Supplier Sustainability Risk Assessment 24

28 SWOT Analysis Strengths: Large product portfolio with multiple applications Strong balance sheet Weaknesses: Association with Apple and Samsung Cyclicality Opportunities Internet of Things growth Emerging economies Threats Foreign exchange risk Geopolitical risk Highly evolving industry 25

29 Proposal Purchase 200 shares at $76.52 for a total of $15,304 26

30 Portfolio Weighting 27

31 Questions 28