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Technology Stocks : Jabil Circuit (JBL)
JBL 196.60+2.1%Nov 21 9:30 AM EST

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To: Michael Anthony who wrote (3328)3/18/1998 7:08:00 PM
From: Rosemary  Read Replies (1) of 6317
 
The Motley Fools Speak:

Manufacturer of circuit board assemblies Jabil Circuit (Nasdaq:JBIL - news) slumped $4 11/16 to $34 25/32 after saying that weakened demand and transitions by its customers to new products will cause slower sales and lower operating income over the next two quarters. However, the company's president told CNBC that the outlook will improve later in the year, possibly leading to 30% growth in EPS for the year. Meanwhile, fiscal Q2 EPS came in at $0.52, up 79% from a year ago and $0.01 ahead of estimates. The company's shares have plummeted 36% from a closing price of $53 13/16 on Feb. 26 and now trade at 18.4 times trailing earnings and 13 times 1999 estimates of $2.65 per share. Although the segment does not trade at market multiples, Jabil's present valuation looks compelling. The company has grown EPS at a compound rate of 250% over the last three years, generating a whopping 34% return on invested capital in the process. Today, investors should weigh the $70 billion industry's projected growth rate of 25% against the risk associated with Jabil's concentrated customer base of rapidly growing companies that are prone to blow-ups -- Jabil's top five customers account for 70% of revenues.
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