Jabil Circuit (NYSE: JBL) is
a leading electronics manufacturing services firm, providing comprehensive design, manufacturing and product management services to global electronics and technology companies. The firm works for original equipment makers in the automotive, storage, medical, networking, telecommunications, computer and consumer products industries. Top customers include Cisco Systems (NASDAQ: CSCO), Hewlett-Packard (NYSE: HPQ) and Nokia (NYSE: NOK).
The company had good news for investors earlier in the week, when it reported fiscal Q3 EPS of 26 cents and revenues of $3.09 billion. Analysts had been looking for 20 cents and $3.08 billion. Management also guided Q4 EPS to 29-33 cents (29 cent consensus) and Q4 revenues to $3.2-$3.3 billion ($3.19B consensus). Credit Suisse subsequently reiterated its "neutral" rating on the stock, but RBC Capital Markets repeated an "outperform" recommendation and Needham said "buy" again.
The JBL
price jumped on the news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers now recommend the shares with six "strong buys", four "buys" and nine "holds". Analysts see a 27% growth rate, through the next year. The stock's Price to Sales ratio (0.24), Price to Book ratio (1.12), Price to Cash Flow ratio (10.10) and EPS Growth rate (62.50%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 85% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $9.03 and $25.80. A stop-loss of $13.65 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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