Apple isn’t the only company cashing in on the new iPad’s sales. A select group of technology companies who help build Apple products are well poised for their own pop, says Stephanie Link, director of research and vice president of strategy at TheStreet.com.
According to Link, the major beneficiaries are Broadcom, Skyworks Solutions, Samsung, and Qualcomm.
“These stocks are up quite a bit. It’s a validation of each company and their technologies, and they’re going to ride the wave,” said Link.
The wave looks a bit like this: iPad unit sales are growing 40 percent this year, while the iPhone is growing 38 percent. “Over time, I think you’re going to see an increase in content per tablet and per phone, so margins will go up for these companies,” she added.
That said, these companies each contribute different parts and services to Apple, and are thus likely to perform quite differently. For example, Link is more bullish on chipmaker Broadcom than Qualcomm .
“Broadcom is cheaper number one, they’re trading at 12 times earnings," she said. This compares with a 17 times multiple for Qualcomm’s forward-looking earnings.
A good track record is also helping Broadcom, Link said. “They’ve been in all the iPad versions. I think they’ll have solid double-digit growth this year," she added.Page 1 of 4 | Next Page