Thoughts on SWKS?

Thanks Dan. I appreciate the response. Brent

Valuations are certainly starting to look attractive on the company again. The main issue with this one is a pandemic driven surge in earnings. It is not expected to hit 2021 earnings per share until 2025 now.

2023 will likely be a year in which the company sees revenue and earnings dip by quite wide margin. Because of this market has readjusted it’s valuation of the company in a pretty material way.

Like you say though it is only trading at 10x expected earnings and 12.8x trailing free cash flows. The company is no doubt cheap right now. Double digit returns on equity, invested capital. The dividend has been growing at a relatively consistent pace ever since it decided to adopt a div growth strategy.

The downsides would be, as you mentioned, reliance on Apple. 64% of sales is hyper concentrated on one client and I’m not sure I would explore it based on that alone. In addition to this, the company is putting out some relatively weak guidance due to low demand.

In my opinion if you’re ok risk wise with the reliance on Apple for sales this is not a bad company at these prices.