Market Overview

Jabil Circuit And Others Favored By Oppenheimer

Jabil Circuit And Others Favored By Oppenheimer

Despite the recent outperformance of the broader markets in the sector, information technology analysts at Oppenheimer believe Corning (NYSE: GLW), Jabil Circuit (NYSE: JBL) and TE Connectivity (NYSE: TEL) are poised for further gains. Corporate technology budgets are expected to grow along with the economy for the rest of this year and through the next.

Note that Oppenheimer also recommended Arrow Electronics (NYSE: ARW), FEI (NASDAQ: FEIC), Ingram Micro (NYSE: IM) and Measurement Specialties (NASDAQ: MEAS) in its research report.

See also: Four Communications Equipment Companies Oppenheimer Likes


This Corning, New York-based company sports a market capitalization of less than $22 billion. Its dividend yield is about 2.7 percent. The price-to-earnings (P/E) ratio is less than the industry average, and the long-term earnings per share (EPS) growth forecast is about 12 percent. The operating margin is greater than the industry average.

The short interest in this diversified electronics and ceramics company was more than two percent of the float as of the July 31 settlement date. That was highest number of shares sold short in at least a year. The days to cover fell to less than three from more than four in the previous period.

Eleven of the 21 analysts surveyed by Thomson/First Call recommend buying shares, with five of those rating the stock at Strong Buy. Their mean price target, or where the analysts think the share price will go, is more than 11 percent higher than the current share price. However, that target is only marginally higher than the 52-week high.

The share price is more than seven percent lower than that 53-week high reached in May, but it is still up more than 17 percent year-to-date. Since the beginning of the year, the stock has outperformed the likes of Furukawa Electric and Sumitomo Electric, as well as the Nasdaq.

Jabil Circuit

This provider of electronics and mechanical design and production services has a market cap of more than $4 billion and a dividend yield of about 1.4 percent. Jabil Circuit has a long-term EPS growth forecast of almost 11 percent, and its return on equity is more than 15 percent.

The short interest in this St. Petersburg, Florida-based company was more than two percent of the total float at the end of July. That was the highest number of shares sold short since last October. The days to cover rose to more than four for the first time this year.

Four of the 13 analysts surveyed rate the shares at Strong Buy, and another four also recommend buying them. The analysts think the stock has little head room though, as their mean price target is only marginally higher than the current share price. That target is also lower than Wednesday's closing price.

The share price reached a 52-week high this week and is more than 21 percent higher year-to-date. Over the past six months, the stock has outperformed the broader markets, but it has underperformed competitor Flextronics International (NASDAQ: FLEX).

TE Connectivity

This maker of electronics and infrastructure components is headquartered in Schaffhausen, Switzerland, and it has a market cap of more than $20 billion. Its dividend yield is near two percent. The long-term EPS growth forecast is more than 12 percent, and the return on equity is more than 16 percent.

The number of shares sold short as of the most recent settlement date represented less than one percent of the total float, after dropping about 41 percent from the previous period. That was the lowest short interest in the past year, and the average daily volume was the highest since January.

Of the 10 analysts polled, all but three of them recommend buying shares, with the rest rating the stock at Hold. Their mean price target indicates that the analysts see more than 11 percent upside potential. That consensus target would be a new multiyear high.

The share price has pulled back a bit from a recent 52-week high, and it is up more than 36 percent year-to-date. TE Connectivity has outperformed competitors Corning and Molex (NASDAQ: MOLX), as well as the broader markets, over the past six months.

See also: Cisco Falls After Q4 Report

At the time of this writing, the author had no position in the mentioned equities.

Posted-In: Arrow Electronic corning FEI Flextronics Furukawa Electric ingram micro Jabil CircuitTrading Ideas Best of Benzinga


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