Apple isn't the only stock that's zoomed because of the iPod. But are iPod suppliers good buys?
February 15, 2005: 12:08 PM EST
By Paul R. La Monica , CNN/Money senior writer
excerpt:
Spinning wheel
Investors in Synaptics have been on a wild ride lately. Shares are down 24 percent this year due to concerns Apple may develop its own click-wheel interface.
But the sell-off may be overdone, said Michael Shulman, director of research with independent research firm ChangeWave Research. He said he's heard from sources in the consumer electronics industry that Synaptics was not at risk of losing all of its Apple-related business.
"People have overreacted. The iPod is strong and we see no reason for investors to run away from one of Apple's key suppliers," he said, adding that Synaptics also sells its touch pad technology to other manufacturers of computers and consumer electronics devices such as Dell, Hewlett-Packard, Samsung and Sharp.
And as a result of Synaptics' plunge, the stock now trades at just 21 times fiscal 2005 earnings estimates, a reasonable valuation considering that analysts expect earnings to grow at a 28 percent clip annually, on average, for the next five years. |
