Jabil Circuit beats the analysts, but risks remain

We're simply not out of the woods yet in terms of the economy, so a company like Jabil will continue to have a hard time getting back on track.

Furthermore, the company will conduct a goodwill impairment analysis to see if it needs to write down assets. With the drop in the stock price, the relationship between market capitalization and book value is not ideal right now. Other businesses have had to deal with the same thing. The economy is forcing them to come to terms with these impairment problems, and even though they tend to be non-cash in nature, they still have the potential to reflect badly upon the stock.

I will say this for Jabil: It generated positive operational cash flow and positive free cash flow. That's pretty cool. As management states, it's good to have liquidity. And the company does pay a dividend. However, I have no interest in buying this stock. We're just not in the right part of the cycle yet. It's a low-priced equity (it closed at $3.81 on Tuesday during the regular session) that is close to the 52-week low.

There aren't many tech stocks I'd recommend at the moment, although I do personally own Microsoft (NASDAQ: MSFT) and am happy with that recent purchase so far. Unfortunately I missed the move with Apple (NASDAQ: AAPL). One thing's for certain: I'll be ignoring Jabil, and if I miss a move there, well, so be it. I just don't like the risk of price action that I feel is currently associated with the stock.

Disclosure: I own Microsoft; positions can change without notice.