" TriQuint just doesn't have the same production capabilities as Skyworks has to muster big orders in small timeframes. " This a quote from a Motley Fool article on Skyworks today. I think they are 100% wrong.
I just looked closer. You can sell May 2013 $5 covered calls for $0.40 (bid). That means you can receive the $0.40 call price plus the $0.12 price appreciation (between $4.88 and $5) for a $0.52 gain with the option expiration date being the 3rd Friday in May. This is a 10.6% gain in 3 months. Quite the deal with $0.40 price protection if this falls and the shares are not called.
The only difference is that you give away any topside gain if TQNT gets over $5.40 in May..........but you take much less risk. Note that TQNT would have reported their 1Q 2013 in late April 2013 but who knows what the guidance would be?
I do wonder if TQNT owning their production facilities is as cost effective and as nimble as contracting it out............especially as most of their facilities are in the USA. That can mean higher taxes as most all their profits are in the USA with their factories.
Owning your production facilities does give them more control..........but in the hands of TQNT management, that hasn't resulted in higher profits.
I will say that I do believe in TQNT's management's comments about a good 2nd half. As such, I am considering buying some shares and selling Jan 2014 covered calls for $0.80/share ($5.80 less $4.88 for profit of $0.92 ~20% annualized return) or Jan 2015 $7 covered calls for $0.65.