Specifically, HSBC ran a screen for U.S. stocks with revenue exposure to China of more than 20%, underperformed during the three-month market pullback on trade deal concerns and exhibited cheap valuation on a forward price-earnings basis. The bank found that among the U.S. companies that fall under these three criteria, Skyworks Solutions (NasdaqGS: SWKS) had a 83% China revenue exposure and 9.8 12-month forward P/E; Broadcom (NasdaqGS: AVGO) had 54% exposure and a 10.7 P/E; Micron (NasdaqGS: MU) had 51% exposure and 4.7 P/E; Marvell Technology (NasdaqGS: MRVL) had 50% exposure and a 11.9 P/E; and Intel (NasdaqGS: INTC) had a 24% exposure and 10.6 P/E.
If the trade negotiations pull through, these companies could be among the best beneficiaries. ETF Investors can also gain exposure to these companies through targeted semiconductor-related ETFs, such as First Trust Nasdaq Semiconductor ETF (FTXL), SPDR S&P Semiconductor ETF (NYSEArca: XSD), iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) and VanEck Vectors Semiconductor ETF (NYSEArca: SMH).
SWKS makes up 4.0% of FTXL and 3.2% of XSD. AVGO makes up 9.3% of SOXX and 6.0% of SMH. MU accounts for 4.1% of SMH, 3.6% of SOXX and 3.0% of XSD. MRVL makes up 3.4% of XSD, 2.6% of FTXL, 2.2% of SOXX and 1.9% of SMH. Lastly, INTC makes up 13.7% of SMH, 8.3% of FTXL and 8.2% of SOXX.
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