The Hidden Winners Behind Apple's Jaw-Dropping Numbers

Apple blew everyone away last week... again. Last Tuesday, Apple reported results for the quarter ending in December. In just three months, Apple sold 37 million iPhones and over 15 million iPads. The craziest part of Apple's quarter is the company's growth rate. Sales of the iPhone grew 128% versus last year. iPad sales rose 111%. And its quarterly revenue increased 73% from the same time last year. Apple shares jumped 6% on the news as more investors piled in. When you strip out Apple's huge cash pile (nearly $100 billion and counting), shares trade around eight times 2012 earnings... So investors should do well. But traders looking for a little more leverage to Apple's ascendancy should consider buying the small companies that supply Apple with the parts that go into all those millions of iPhones and iPads. Many of these suppliers got clobbered in late 2011, but their low price levels and relationships with Apple could produce big gains in 2012... Nuance Communications (NUAN), for example, is a software company that specializes in speech recognition. One of the main features on the latest iPhone is "Siri." Siri answers questions and sends text messages for iPhone users. The user doesn't need to type anything. Instead, he can simply talk to his phone, asking Siri to do the work. Nuance licenses the technology that the "Siri" interface is based on. Although the contract between Apple and Nuance isn't public, voice-based interfaces look like a solid bet to become the next standard features on smartphones. Shares of Nuance trade around 17 times 2012 earnings expectations. That's not bad for a company with a product that phonemakers will be desperate to include in their future models. The stock touched an all-time high earlier this month. It's a perfect candidate for buying if it pulls back in the next few weeks. Semiconductor names like TriQuint (TQNT) and Skyworks (SWKS) are long-time Apple suppliers. Both companies focus on the little parts that manage power and other important processes in mobile devices. As I mentioned last week, these kinds of small semiconductor stocks took a beating last year as investors fled from risky stocks. Following the "bloodbath" in the small-cap semiconductor sector, investors cut their growth expectations on these companies to around 10% per year. But if Apple's latest results are any indication, these names could deliver much bigger growth in 2012. As I said in my previous essay, these are perfect low-risk, high-reward trades. Lastly, TTM Technologies is a tiny supplier of printed circuit boards (PCBs). PCBs are the backbone of many electronic products. The specialized "components" of a device are attached to the PCB, which then handles the communication between them. TTM differentiated itself by focusing on complex PCBs, instead of "commoditized" products. Apple is one of TTM's biggest customers, accounting for more than 10% of the company's sales. PCBs aren't a "glamorous" product, so TTM has a low multiple. Shares trade around 10 times 2012 earnings. Like most small-cap tech stocks, shares are way below their 2011 highs.