5 Cheap Semiconductor Stocks To Buy Now

In this article, we will take a look at the 5 cheap semiconductor stocks to buy now. If you want to explore similar stocks, you can also read 10 Cheap Semiconductor Stocks To Buy Now.

5. Skyworks Solutions, Inc. (NASDAQ:SWKS)

PE Ratio as of January 3: 11.69

Number of Hedge Fund Holders: 39

Skyworks Solutions, Inc. (NASDAQ:SWKS) is a leading provider of analog and mixed-signal semiconductors. The company’s products are used in a variety of end markets including aerospace, automotive, broadband, cellular infrastructure, connected homes, entertainment & gaming, industrial, medical, military, and consumer electronics. Skyworks Solutions, Inc. (NASDAQ:SWKS) is one of the best cheap semiconductor stocks to buy now and is trading at a PE multiple of 11x, as of January 3.

On November 30, KGI Securities analyst Derek Chang upgraded Skyworks Solutions, Inc. (NASDAQ:SWKS) to Outperform from Neutral and maintained his $130 price target on the shares.

Skyworks Solutions, Inc. (NASDAQ:SWKS) is a cash-rich company that is also paying out a solid dividend to shareholders. As of January 3, the company is offering a forward dividend yield of 2.72% and has free cash flows of $914.9 million.

At the end of Q3 2022, 39 hedge funds held stakes in Skyworks Solutions, Inc. (NASDAQ:SWKS). The total value of these stakes was estimated at $963.8 million. As of September 30, Millennium Management is the dominant investor in the company and has a position worth $142.4 million.

Here is what Heartland Advisors had to say about Skyworks Solutions, Inc. (NASDAQ:SWKS) in its third-quarter 2022 investor letter:

“Before the risk-on rebound early in the quarter, we were searching for opportunities to shift from our defensive stance, looking for beaten-down, high-quality “early cycle” leaders. Existing holding, Skyworks Solutions, Inc. (NASDAQ:SWKS), represents one such opportunity that was added to on weakness.

Skyworks is one of two leading providers of radio frequency system components to smartphone makers and electronics manufacturers. With every step-up in product complexity, over the past two decades, the competitive landscape has shrunk while gross margins have increased significantly. 5G represents another such step-up, which is likely to increase how much Skyworks can make per smartphone.

Apple is a big customer, accounting for more than half of Skyworks’ sales. That customer concentration has depressed Skyworks’ valuation over time. More recently, fears surrounding a global recession and risk to consumer demand have further pressured valuation. However, the handset business is expected to benefit from 5G content, which may help offset some macroeconomic pressures. Away from the handset business, Skyworks’ growth is expected to accelerate thanks to other secular drivers such as WIFI 6 and growth of the industrial internet (i.e., “Internet of Things”).

At a P/E of less than eight and a 2.3% dividend yield, SWKS rarely gets this cheap, making this high-quality stock compelling for longterm investors.”