Here’s Why Semper Augustus Investments Liquidated their Skyworks (SWKS) Position
Semper Augustus Investments Group, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. In the lengthy letter, the fund talked about the activities in their portfolio and other important updates which they quoted, “The Path From Deflation; Expedition Everest; and – Berkshire: The GOAT Goes Full Repo”. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Semper Augustus Investments Group, in their Q4 2020 Investor Letter, said that they’ve liquidated their position in Skyworks Solutions, Inc. (NASDAQ: SWKS) to look for better opportunities. Skyworks Solutions, Inc. manufactures semiconductors for use in Radio Frequency and mobile communications systems. It currently has a $30.3 billion market cap. For the past 3 months, SWKS delivered a decent 30.15% return and settled at $177.82 per share at the closing of February 26th.
Here is what Semper Augustus Investments Group has to say about Skyworks Solutions, Inc. in their Q4 2020 investor letter:
"Analog semiconductor manufacturer Skyworks was also completely liquidated. The stock had reached our appraisal of fair value early in the year and then fell by half, back to our cost basis in March. Worried about the duration of loss of demand in consumer electronics and having better opportunities, we sold the Skyworks position, wanting the cash for deployment elsewhere. Skyworks was sold at approximately our original cost basis, all of the prior gain evaporated. The Skyworks sale was boneheaded, as the shares not only doubled back to their highs but continued higher from there. That the proceeds were invested well doesn’t remedy that the sale was of too good of a company at way too low a price. Opportunity cost in this case was opportunity lost."
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Our calculations show that Skyworks Solutions, Inc. (NASDAQ: SWKS) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds: 2020 Q4 Rankings. As of the end of the fourth quarter of 2020, Skyworks was in 41 hedge fund portfolios, compared to 50 funds in the third quarter. SWKS delivered a 76% return in the past 12 months.
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