Barbarian At The Gate: Jabil Circuit (JBL)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Jabil Circuit as such a stock due to the following factors:
- JBL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.2 million.
- JBL has traded 818,895 shares today.
- JBL traded in a range 277.6% of the normal price range with a price range of $1.13.
- JBL traded above its daily resistance level (quality: 512 days, meaning that the stock is crossing a resistance level set by the last 512 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on JBL:
Jabil Circuit, Inc., together with its subsidiaries, provides electronic manufacturing services and solutions worldwide. The stock currently has a dividend yield of 1.4%. Currently there are 4 analysts that rate Jabil Circuit a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Jabil Circuit has been 1.7 million shares per day over the past 30 days. Jabil Circuit has a market cap of $4.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.06 and a short float of 2.6% with 3.30 days to cover. Shares are up 3.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Jabil Circuit as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.
Highlights from the ratings report include:
- JBL's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 60.65% to $189.10 million when compared to the same quarter last year. In addition, JABIL CIRCUIT INC has also vastly surpassed the industry average cash flow growth rate of -5.63%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, JABIL CIRCUIT INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 38.8% when compared to the same quarter one year ago, falling from $117.92 million to $72.16 million.
- You can view the full Jabil Circuit Ratings Report.
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