Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 1 of 7 PageID #: 3484
`Case 5:19-cv-00036—RWS Document 66-40 Filed 08/27/19 Page 1 of 7 PageID #: 3484
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`EXHIBIT 39
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`EXHIBIT 39
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 2 of 7 PageID #: 3485
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
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`AP
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`Here's Why the Best is Yet to Come for Skyworks
`Solutions, Inc.
`
`newsfeedback@fool.com (Leo Sun) May 27, 2017
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`https://madison.com/business/investment/markets-and-stocks/here-s-why-the-best-is-yet-to-come-for/article_48805796-fed1-5994-af75-e23916feb21d… 1/6
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 3 of 7 PageID #: 3486
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
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`It's been a great year for Skyworks Solutions (NASDAQ: SWKS), which supplies
`power amplifiers, front-end modules, and RF chips to a wide variety of markets. The
`company has soundly beat top and bottom line expectations for four straight quarters,
`and its stock has rallied more than 60% over the past 12 months. But looking ahead,
`Skyworks could still have room to run for five simple reasons.
`
`1. Apple's upcoming iPhone
`
`Skyworks supplies its chips to the mobile, automotive, broadband, wireless
`infrastructure, home automation, industrial, and military markets. But its biggest
`customer by far is Apple (NASDAQ: AAPL), which contributed 40% of its revenues in
`fiscal 2016.
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 4 of 7 PageID #: 3487
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
`Image source: Apple.
`
`This makes Skyworks a great supply chain play on the upcoming iPhone 8. Stifel
`Nicolaus analyst Aaron Rakers estimates that Apple will sell 224.7 million iPhones this
`year and 250.6 million units in 2018 -- which would represent an impressive rebound
`from its first annual decline in 2016.
`
`2. Content share gains in newer smartphones
`
`As the technology in smartphones improves, the number of power amplifiers, front-end
`modules, and RF chips per device increases. For example, an iFixit teardown of the
`iPhone 6s revealed two Skyworks components inside, while the iPhone 7 teardown
`found four components.
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`Just over a year ago, Skyworks reported that it had a content share of $1 to $2 per 3G
`device, more than $3 per 4G device, and over $5 per "advanced" 4G device. But during
`last quarter's conference call, CEO Liam Griffin declared that certain high-end 4G
`devices were "approaching $8 to $10 in value," spurred by the growing use of its
`SkyOne, DRx technology, and DC/DC technologies. Huawei, in particular, notably
`packed ten Skyworks modules into its latest Honor smartphones:
`
`Image source: Skyworks' Investor Presentation.
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`3. Better connections equal bigger content share gains
`
`The main theme here is that fancier smartphones on faster networks will constantly
`boost Skyworks' average content share per device. The smartphone market may seem
`saturated today, but Ericsson (NASDAQ: ERIC) Mobility estimates that the total
`number of mobile smartphone subscriptions worldwide will still rise from 3.9 billion in
`2016 to 6.8 billion in 2022.
`
`Within that total, Ericsson expects 4G/LTE subscriptions to rise from 1.9 billion to 4.6
`billion, and for 5G subscriptions to grow from nothing today to 540 million. This
`represents a huge long-term growth opportunity for Skyworks, as smartphone volumes
`grow and its content share per device increases.
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 5 of 7 PageID #: 3488
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
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`4. The Internet of Things is expanding
`
`But over the next few years, Skyworks expects its dependence on Apple and other
`smartphone makers to wane as the total number of connected devices across the Internet
`of Things (IoT) surges. Skyworks believes that there will be over 25 billion connected
`devices worldwide by 2020 -- a figure which would easily dwarf the smartphone
`market.
`
`That growing market includes wearable devices, connected cars, drones, smart speakers,
`home automation devices, and headsets for augmented and virtual reality applications.
`Its modules are already used in stand-alone 4G smartwatches like Samsung's Galaxy
`Gear 3, connected cars like the new Jaguar F-Type, and Alphabet's Google OnHub
`router and smart home hub.
`
`Image source: Skyworks Investor Presentation.
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`5. Growing margins, prots, and revenues
`
`The RF module market generally isn't considered a high-margin one, but Skyworks'
`gross margins have gradually expanded over the past few years as it scaled up its
`operations.
`
`Source: YCharts
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`https://madison.com/business/investment/markets-and-stocks/here-s-why-the-best-is-yet-to-come-for/article_48805796-fed1-5994-af75-e23916feb21d… 4/6
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 6 of 7 PageID #: 3489
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
`That margin expansion, along with robust gains in shipment volumes and content share,
`are expected to boost the company's top and bottom lines for the foreseeable future.
`Analysts expect Skyworks' revenue to rise 11% this year and another 10% next year. On
`the bottom line, its earnings are expected to rise 13% this year and another 14% in fiscal
`2018.
`
`Should you buy Skyworks today?
`
`I previously highlighted Skyworks as one of the best Apple supplier plays on the
`market, and I still stand by that assessment. It's also a solid long-term play on the
`Internet of Things market. To top it off, Skyworks' current P/E of 22 is lower than the
`industry average of 26 for semiconductor makers, and it pays a forward dividend yield
`of 1.1%.
`
`I believe those facts make Skyworks a compelling buy at current prices, but investors
`should still fully evaluate the risks -- like an unexpected drop in iPhone sales or
`emerging competitors in the RF space -- before buying any shares.
`
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`buy right now... and Skyworks Solutions wasn't one of them! That's right -- they think
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`Case 5:19-cv-00036-RWS Document 66-40 Filed 08/27/19 Page 7 of 7 PageID #: 3490
`8/23/2019
`Here's Why the Best is Yet to Come for Skyworks Solutions, Inc. | Business Markets and Stocks News | madison.com
`Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of
`directors. Leo Sun has no position in any stocks mentioned. The Motley Fool owns
`shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and
`Skyworks Solutions. The Motley Fool has the following options: short November 2017
`$95 calls on Skyworks Solutions and short November 2017 $92 puts on Skyworks
`Solutions. The Motley Fool has a disclosure policy.
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