The latest version of
Apple's (Nasdaq: AAPL)
iconic smartphone, the iPhone 5, has been a huge sales hit. The
phone saw record pre-order sales prior to its September release,
and sales figures only got better once the device was released.
According to a recent report frominvestment bank Canaccord
Genuity, Apple saw "very strong sales" of the iPhone 5 at
AT&T (
T
)
,
Verizon (
VZ
)
and
Sprint Nextel (
S
)
, as well as in international markets.
According to Canaccord, Applewill sell 47.5 million iPhones in
the current quarter, up from its prior forecast for 45 million.
That's good news for Apple, but what's even better news are the
company's plans to sell the smartphone in another 50 countries by
the end of this year.
In fact, on Monday, Apple announced that the iPhone 5 will be
released in South Korea on Friday, Dec. 7, and that it will be
released in 50 other countries later this month. News of the
additional country releases came on top of the recent big
announcement that the iPhone 5 would be available in China as of
Friday, Dec. 14.
For traders, news of the additional markets for the iPhone 5
should be viewed as an opportunity to jump on stocks of the
companies that supply the electronic guts that actually make up the
iPhone.
But what companies make the components that make the iPhone 5
work?
Traditionally, Apple doesn't release the names of the companies
that make the components in its products. Of course, that doesn't
hinder the inquiring minds of the tech andinvestment world.
According to the tech group ifixit, which conducted a teardown
of the iPhone 5 that revealed its component parts, it is comprised
of parts from
Avago Technologies Ltd. (Nasdaq: AVGO)
,
Cirrus Logic (Nasdaq: CRUS)
,
Qualcomm (Nasdaq: QCOM)
,
Skyworks Solutions Inc. (Nasdaq: SWKS)
,
STMicroelectronics (
STM
)
and
TriQuint (Nasdaq: TQNT)
.
I suspect the announcement of the additional country releases
should help all of these component parts makers do well over the
next couple of months, and that means upside opportunity for
traders who want to get long the sector.
Here are two of my preferred ways to get long the iPhone 5
global release without actually have to fork over close to $600 a
share for Apple:
Qualcomm (Nasdaq: QCOM)
The chipmaker supplies the main ingredient that makes the iPhone 5
work, and as such, it is perhaps the go-to play in the segment if
you want to get long Apple without actually buying Appleshares
.
Since the start of November, Qualcomm shares have surged almost
6%, and I suspect that run higher is in part due to anticipation of
the iPhone 5 global expansion.
As you can see, the stock enjoyed a great November, with shares
trading back above both the short-term,50-day moving average , as
well as the long-term,200-day moving average . The recent breakout
in the stock could easily see shares continue to rise to new
52-week highs near $69. In fact, I expect Qualcomm shares to climb
above the $70 level soon, and that couldmean more than 10% gains
over the next two months.
Action to Take -->
Buy Qualcomm at themarket price . Set stop-loss at $58.58. Set
initialprice target at $70 for a potential 11% gain in two
months.
Avago Technologies (Nasdaq: AVGO)
The other stock I like here on the iPhone 5 global expansion is
Avago Technologies. This firm makes an assortment of digital power
amplifiers, two of which are used in the new iPhone. Avago scored a
big win with the iPhone 5, and like Qualcomm, the new iPhone 5
markets are likely to propel this stock back above its52-week high
.
The chart here shows the big spike higher during the past week,
no doubt due to favorable news that the iPhone 5 will begin selling
in China. The additional markets announcement should only fuel
interest in the stock going forward.
Technically speaking, Avago shares also have broken through the
50-day and 200-day moving averages, another clear sign that the
smart money is gettingbullish on the shares.
Action to Take -->
Buy AVGO at the market price. Set stop-loss at $32.11. Set initial
price target at $39 for a potential 12% gain in two months.
This article originally appeared on TradingAuthority.com:
2 Ways You Could Score Double-Digit Gains Without
Paying $575 for Apple