Why Flextronics International (FLEX) Stock Hit a One-Year High Today

NEW YORK (TheStreet) -- Flextronics International  (FLEX) shares hit a 52-week high of $11.83 on Wednesday after the company announced Tuesday it had received approval to buy back up to 20% of its shares.

Flextronics said its board of directors permitted management to purchase up to $500 million of the company's stock.

Flextronics has bought approximately $1.7 billion in shares, or about 247 million shares, in the last four years.

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The company said price, market status and legal conditions would affect the schedule and number of shares repurchased after this latest approval. Flextronics did not provide a timetable for the buyback and said it could elect to halt or end the program at its discretion.

More than 7.7 million shares had changed hands as of 12:17 p.m., compared to the average volume of 4,029,580.

Separately, TheStreet Ratings team rates FLEXTRONICS INTERNATIONAL as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FLEXTRONICS INTERNATIONAL (FLEX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 14.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • FLEXTRONICS INTERNATIONAL reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, FLEXTRONICS INTERNATIONAL increased its bottom line by earning $0.58 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 193.4% when compared to the same quarter one year prior, rising from $59.26 million to $173.89 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, FLEXTRONICS INTERNATIONAL's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: FLEX Ratings Report

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