Mott Capital Scores on Semiconductors, Calls Netflix/Comcast Deal “A Game Changer”

Skyworks Solutions Inc. (NASDAQ:SWKS) manufactures analog semiconductors for automotive, broadband, wireless infrastructure & networking, GPS and other communication applications. The stock has shot up 21% since August this year. Mr. Kramer said in the letter that, similarly to NXP Semiconductors, Skyworks Solutions has also benefited from the M&A-related activity in the semiconductor space and the success of Apple’s iPhone 7 provided the stock with more lift. Mott Capital estimated that every iPhone contains around $7 worth of parts produced by Skyworks. Approximately 4.4% of the company’s stock was held by 33 hedge funds tracked by us at the end of June.

Netflix Inc. (NASDAQ:NFLX) was a new addition to Mott Capital’s portfolio during the quarter. Netflix Inc. (NASDAQ:NFLX) should benefit from the increasing growth of “on demand” video streaming. The company has signed a deal with Comcast to offer Netflix services on Comcast set top boxes and a content partnership with Liberty Global plc (NASDAQ:LBTYA). According to Michael Kramer, the Netflix-Comcast deal could be a game changer for the company. The stock is up by 9% since the beginning of the year and has returned more than 30% in the last one month alone. This $54 billion company has a subscriber base more than 86 million. It added 3.57 million new subscribers during the third quarter including 3.2 million international customers and expects to add another 5.2 million subscribers in the upcoming quarter. According to our data, 54 funds held shares of Netflix with a total value of $3.73 billion at the end of June.

Interesting read: The 5 Best Documentaries on Netflix You Must See

HAIN Celestial Group Inc. (NASDAQ:HAIN) has been the worst performer in Mott Capital’s portfolio. In the last three months, the stock has lost more than 30%, owing to a flaw in revenue recognition. However, according to Mott Capital’s portfolio manager, it is a matter of the timing of revenue recognition and there is nothing fraudulent. The stock performance has started to show signs of improvement returning almost 3% in the last one month. A total of 23 funds from our database held shares of HAIN Celestial Group Inc. (NASDAQ:HAIN) at the end of June, up by four over the quarter. The aggregate value of their holdings surged by 63% on the quarter to $346 million.

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