Apple supplier shares targeted despite 40% drop

Apple supplier shares targeted despite 40% drop

One of last year’s top-performing European stocks has lost nearly half of its value in the past five months, yet short-sellers keep flocking to it.

Austrian sensor maker AMS has fallen more than 40% from its all-time peak in March amid concerns over the smartphone supply chain and shorters are betting on more downside.

Meanwhile, brokers rate it as among the best buys in Europe, boosted by a technological edge in sensors used in Apple’s iPhone X.

No analysts among the 18 surveyed by Bloomberg recommend selling AMS, and its consensus rating is the eighth-highest among the 600 companies making up the Stoxx 600 Index, better than any semiconductor peers in the benchmark.

The positive view is evident in lofty growth expectations, at least partly explained by the company’s first-mover advantage in 3D sensing components, used in applications such as the iPhone X’s facial recognition.

The company’s net income is expected to more than double next year to nearly $500m (€433m), according to a survey of 13 analysts.

Apple’s push into augmented reality has made AMS a crucial supplier for the optical components it needs to differentiate its flagship phone from competitors’ offerings.

The big question for AMS investors is how long their advantage in that technology will last.

With new technology, you can charge a customer like Apple a higher price, because you’re the only supplier,” Neil Campling, an analyst at Mirabaud, said.

“That’s where the big disconnect between the bulls and bears at the moment is, will they deliver that operating leverage and profit, will they remain a sole source,” he said.

Other chipmakers have also hit a rough patch in the markets lately

.

- Bloomberg

More on this topic

Irish Apple reseller Compu B buys rival UK firmIrish Apple reseller Compu B buys rival UK firm

Apple no longer using contractors to listen to Siri recordings, Dáil committee hearsApple no longer using contractors to listen to Siri recordings, Dáil committee hears

Apple reveals most popular App Store downloads in the UKApple reveals most popular App Store downloads in the UK

Apple criticised over change to Maps app which shows Crimea as Russian territoryApple criticised over change to Maps app which shows Crimea as Russian territory

More in this Section

Andrew Lloyd Webber wins tax fight over Barbados villasAndrew Lloyd Webber wins tax fight over Barbados villas

Economy grows 1.7% in third quarter of 2019; GDP up 5% in last 12 monthsEconomy grows 1.7% in third quarter of 2019; GDP up 5% in last 12 months

US and China ‘close to trade deal’US and China ‘close to trade deal’

Surging pound up 1.29% against the euro on election resultSurging pound up 1.29% against the euro on election result


Lifestyle

Jazz in Europe these days exists in a highly networked environment of cultural and political bodies, festivals, promoters, musicians and educators.Jazz Connective Festival: Intriguing, exciting and uncompromising

It will be bittersweet for Stormzy that his second album arrives the day the British Labour party was confirmed as suffering a historic general election trouncing.Album review: Stormzy remains a work in progress

Unique drawings by Quentin Blake, one of Britain’s best-loved illustrators, are available at a Christie’s online auction which runs until December 17.Your chance to buy drawings by Roald Dahl illustrator Quentin Blake

Ciara McDonnell talks to four high-profile people about their festive traditions and favourite tracksHere's what has these famous faces rockin’ around the Christmas tree

More From The Irish Examiner