3 iPhone Suppliers Moving on Apple Earnings

iPhone suppliers Broadcom Ltd (NASDAQ:AVGO), Cirrus Logic, Inc. (NASDAQ:CRUS), and Skyworks Solutions Inc (NASDAQ:SWKS) are swinging wildly after Apple Inc. (AAPL) earnings

Apr 27, 2016 at 10:12 AM
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Apple Inc. (NASDAQ:AAPL) is crumbling this morning on lackluster earnings and the first-ever year-over-year decline in iPhone sales. The results are taking a toll on Apple suppliers overseas, too. Today, we'll be checking in on three U.S.-traded companies -- Broadcom Ltd (NASDAQ:AVGO), Cirrus Logic, Inc. (NASDAQ:CRUS), and Skyworks Solutions Inc (NASDAQ:SWKS) -- to see what's been happening on the charts and in the options pits.

AVGO has explored a huge range this morning, but at last check, was down 0.8% at $149.56. More broadly speaking, the tech stock has been red hot since its most recent low of $114.25 in mid-February, up nearly 31%. Today's move may be well-received by options traders. During the past two weeks across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 1.87 AVGO puts for every call -- a ratio that ranks in the 95th annual percentile. If Broadcom Ltd can resume its prevailing trend to the upside, a capitulation among option bears could result in outsized gains.

CRUS, meanwhile, has soared 6.1% to trade at $35.99, after Stifel boosted its price target to $42 from $44. On a year-to-date basis, the stock is sitting on a sensational 22% lead. Just yesterday, the tech firm reported earnings of its own -- however, unlike AAPL, Cirrus Logic, Inc. topped estimates. Options traders remain bearishly positioned toward the shares, though. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.30 ranks in the top quarter of all readings taken in the last year. What's more, CRUS' Schaeffer's put/call open interest ratio (SOIR) of 2.81 represents an annual put-skewed peak. An unraveling of this negativity could contribute to further gains down the road.

Last of all, SWKS -- which is gearing up to report earnings tomorrow night -- has swung 2.1% lower to hover near $70.21, after receiving price-target cuts from Raymond James (to $81) and Needham (to $73). This hasn't been a particularly kind year for the tech stock, which has lost almost 9%, and was recently rejected by its 180-day moving average. Bearish options traders can't be pleased. Skyworks Solution's Inc's 10-day put/call volume ratio of 2.10 at the ISE, CBOE, and PHLX outstrips 97% of all other readings from the past year. Likewise, the stock's SOIR of 1.13 is just 4 percentage points from a 52-week high.
 

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