Trade-Ideas LLC identified

Sanmina

(

SANM

) 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 Sanmina as such a stock due to the following factors:

  • SANM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.6 million.
  • SANM has traded 898,075 shares today.
  • SANM traded in a range 283.7% of the normal price range with a price range of $2.40.
  • SANM traded above its daily resistance level (quality: 222 days, meaning that the stock is crossing a resistance level set by the last 222 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 SANM:

Sanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide. SANM has a PE ratio of 9. Currently there are 2 analysts that rate Sanmina a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sanmina has been 565,400 shares per day over the past 30 days. Sanmina has a market cap of $1.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.79 and a short float of 3.9% with 3.72 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sanmina as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Electronic Equipment, Instruments & Components industry average. The net income increased by 18.1% when compared to the same quarter one year prior, going from $20.72 million to $24.48 million.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, SANMINA CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • SANMINA CORP has improved earnings per share by 20.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SANMINA CORP increased its bottom line by earning $2.26 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 3.1% in earnings ($2.19 versus $2.26).

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