Skyworks Solutions Inc. (NASDAQ:SWKS) is the best true performer in the S&P 500 year-to-date in 2015. Sure, consumer giant Kraft Foods Group Inc. (NASDAQ:KRFT) and drugmaker Hospira, Inc. (NYSE:HSP) are technically ahead in the list of the best stocks of the S&P so far, but those ships have sailed because the big pop in shares for KRFT and HSP are predicated on buyout bids.
Skyworks, on the other hand, has run up an impressive 33% since Jan. 1 — and about 150% in the last 12 months with 330% gains in the last two years!
That means that if you’re looking to buy high and sell higher, Skyworks could be your best bet. SWKS stock assuredly has momentum right now — and also has the fundamentals to keep it headed in the right direction.
SWKS Stock Riding Strong Results
If you’re looking for reasons that a stock this hot should get even hotter, consider that Skyworks posted 59% revenue growth in Q1 thanks in part to a hardware partnership with Cisco Systems, Inc. (NASDAQ:CSCO) as well as strong overall demand for its semiconductors across the entirety of the technology sector.
Also consider that after this run, SWKS stock has a forward price-to-earnings ratio of about 17.3 — lower than the S&P 500 at large.
To top it off, analysts remain bullish on the semiconductor company, with Northland Capital, Topeka Capital Markets and Cannacord Genuity all reiterating strong ratings in March and increasing their price targets to reflect the recent run-up.
There is admittedly risk of a slowdown, either via competition from competitors like Avago Technologies Ltd (NASDAQ:AVGO) or from a slowdown in consumer and business spending causing weakness in the manufacturers that use Skyworks semiconductors in their products.
However, it appears that SWKS stock has a strong track record of growth and the relationships necessary to keep its business moving in the right direction. Furthermore, the worst seems to be over in Europe and hopes of a stimulus effort in China could increase economic activity across Asia.
Investors simply don’t have a lot of good growth options right now, and they’ve been willing to chase Skyworks as a result. But given the comparatively reasonable earnings multiple compared with other tech stocks, you still might have an opportunity to buy in to SWKS stock even after this run and make a pretty penny in the months ahead.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.
