In this five-year chart of JBL, above, we can see a number of swings up and down over the years but the big picture has been a sideways market roughly between $16 and $25 for the most part. Notice in the last rally to $24 from $16 that started at the beginning of 2014, the Moving Average Convergence Divergence oscillator (a trend following indicator used by many chartists) was just crossing from below the zero line. The same setup can be seen now at the extreme right of the chart. This time this positive sign is coming from a higher low above $18 -- a subtle clue that buyers are paying up.
This longer-term chart of JBL, above, gives us another perspective. Again we can see the prolonged sideways trading since 2011, but notice the strong rise in the On-Balance Volume (OBV) line in 2009 and 2010 telling us that JBL was bought heavily. The sideways OBV line since 2012 tells us that longs have retained their positions.
Last is our Point and Figure chart, below, which ignores time and volume and concentrates on price reversals.
This chart, above, shows buying coming in at the $13 and then $17. On the top end of the chart a move above $24 will be very bullish and should break JBL out of its technical purgatory. Shares surged as much as 8% to over $21 in pre-market trading after the company's earnings per share and revenue views exceeded estimates.
Separately, TheStreet Ratings team rates JABIL CIRCUIT INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate JABIL CIRCUIT INC (JBL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 15.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $357.50 million or 30.10% when compared to the same quarter last year. In addition, JABIL CIRCUIT INC has also modestly surpassed the industry average cash flow growth rate of 29.29%.
- JABIL CIRCUIT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JABIL CIRCUIT INC swung to a loss, reporting -$0.03 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus -$0.03).
- 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 61.6% when compared to the same quarter one year ago, falling from $188.26 million to $72.20 million.
- JBL has underperformed the S&P 500 Index, declining 6.52% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: JBL