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Readers of Money Morning who acted on the Apple supplier stocks recommendations I made just four months ago have made as much as 55%.
On Dec. 7, I shared seven Apple supplier stocks I thought would outperform broader markets. Each of these stocks had a high exposure to Apple – that is, a large percentage of their business comes from supplying Apple.
My expectation was that as the hype over the upcoming iPhone 8 began to build, forecasts of blockbuster iPhone sales would follow. Because this year is the 10th anniversary of the iPhone, the new models are expected to have at least one gotta-have-it feature that will spur a tremendous wave of upgrades.
The anticipation of a big sales boost from the iPhone 8 has helped push Apple stock to new all-time highs in recent weeks.
But I knew that as Wall Street came to realize how those higher sales also would boost the biggest Apple suppliers, their stock prices would rise as well.
The biggest winner was InvenSense Inc. (NYSE: INVN), which is up a little more than 55% since I shared those suppliers with readers on Dec. 7.
INVN stock jumped just days after that article appeared on rumors that Japanese electronics company TDK Corp. was in talks to buy InvenSense.
The rumors proved to be true. TDK announced Dec. 21 its intentions to buy InvenSense for $13 a share, or $1.3 billion.
There was some luck involved in that pick – a major acquisition deal is a quick road to profits – but of the seven Apple Inc. (Nasdaq: AAPL) suppliers I recommended in December, six are in positive territory. Four (including INVN) are up more than 25%.
Today I've got two more Apple supplier stock picks for you. First let's take a look at each of December's other winners.
How Our Apple Supplier Stock Picks Have Performed
- Jabil Circuit Inc. (NYSE: JBL): Jabil makes iPhone casings and tends to be sensitive to Apple/iPhone news. Since Dec. 7, it's up about 35%. JBL stock has risen steadily over the past four months as talk of the iPhone 8 "supercycle" has ramped up. Jabil is also seeing growth from its non-Apple customers, which means this stock should continue to rise.
- Broadcom Ltd. (Nasdaq: AVGO): Broadcom stock is up 27% since Dec. 7. It makes the chips the iPhone needs for wireless communications. In February, an analyst for JPMorgan suggested Broadcom and Apple are collaborating on wireless charging technology, which could be a future catalyst for AVGO stock. And just two weeks ago we got more good news on the Apple-Broadcom front: the companies signed a three-year deal. That ensures Broadcom's chips will be featured in the iPhone for at least the next few product cycles.
- AEHR Test Systems (Nasdaq: AEHR): Apple is AEHR's largest customer; it tests the chips used in the iPhone. Over the past four months AEHR stock is up more than 25%. New features in the iPhone 8 will require new chips, which means more business for AEHR. Like Jabil, AEHR stock shows promise for continued gains.
- Knowles Corp. (NYSE: KN): Knowles stock is up about 13%. The company makes specialty microphones that go into the iPhone. Its tech helps make Siri possible. In addition to the extra sales the iPhone 8 will bring, Knowles is ideally positioned to gain business from the spread of voice assistant tech, such as Amazon.com Inc.'s (Nasdaq: AMZN) Alexa.
- Cirrus Logic Inc. (Nasdaq: CRUS): CRUS stock is up about 12% over the past four months. This company is one of the most dependent on Apple, with two-thirds of its business reliant on the tech giant. While Cirrus stands to get a big boost from the iPhone 8 in the year ahead, some analysts suspect that Samsung has included its noise-cancelling tech in the headphones for the Galaxy S8.
- Glu Mobile Inc. (Nasdaq: GLUU): Glu is the only stock in the group that has declined since we took a close look at these Apple suppliers. It's down about 3.5%. While not a supplier per se, Glu develops games and other apps for the iOS system that runs the iPhone and the iPad. Half its business comes from iOS products. Unlike the chip suppliers, GLUU won't see any benefit from the iPhone 8 until after customers buy it and start buying apps for their shiny new toy. Expect Glu stock to be higher by early 2018.
Now here are the two Apple supplier stocks I promised you – one for investors who want a "safe" bet and a riskier one for investors looking for maximum gains…
Two Apple Supplier Stocks to Buy Now
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.