Booming iPod market is good news for Wolfson

By Annunziata Rees-Mogg Dec 12, 2005

Share with
friends:

Comments (0) Print this article

Stockings full of iPods could make this a merry Christmas for Wolfson Microelectronics (WLF), says Steven Frazer in Shares. This Scottish micro-chip maker is a supplier to Apple, and Christmas should see demand for Apple products soar.

But Wolfson is about more than just Apple. If you have a TomTom satellite navigation system, or a Sony PlayStation Portable, you’re probably using a Wolfson chip. All three of these products have been “flying off the shelves”, says The Scotsman. Which is one reason why the shares rose 9% on the back of its last trading statement.

But the good news for investors isn’t over. If Wolfson is right that the MP3-player market could double in the next couple of years and that portable devices will see “continued strong demand”, then there could be plenty of upside left.  

The company’s competitors are on an average prospective p/e of 23 for the next 12 months, which makes Wolfson’s ratio of 19 for next year seem less chunky. And as forecasts suggest that its earnings per share will increase by 65% over the next year, its p/e to growth ratio (PEG) is a very reasonable 0.32 times.

Overall, “returning to their record 320p level of last year looks feasible over the next six months or so”, says Frazer (tipping the shares at 235.5p), while The Independent is sticking with its view that the shares are a “long-term gem”.

Comments (0)

Published in Tips & advice | More articles by Annunziata Rees-Mogg

Share with
friends:

Related articles

Leave a comment

This will be the name displayed with your comment.

This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.

Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.

captcha To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.

By leaving a comment you accept our terms and conditions.


FREE - MoneyWeek's daily investment emailJohn Stepek

Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.

>