Just FYI,
09:15 ET******
JABIL CIRCUIT (JBL) 69 1/2. The market is already pricing this stock for substantially greater profit growth in the quarters ahead. Before the open Wednesday, circuit board manufacturer Jabil Circuits (JBL) reported first fiscal (Nov) profits of $0.50 per share. That good news is this was 7 cents ahead of expectations, the bad news is this was a very slim penny ahead of the prior year's $0.49. That penny amounts to 2% growth. JBL stock has surged 200% from just 23 in August on the belief that better times lie ahead. In fact, expectations are for 18% earnings growth in the year just started, so a strong, immediate pickup is forecast from the 2% year-over-year profit growth this quarter. It might well happen. JBL posted 40% revenue growth this quarter, and this was the first full quarter after they acquired a unit of Hewlett-Packard. If they can squeeze higher margins going forward as the acquisition becomes integrated, profits will grow faster. JBL stock now trades at 38 times trailing 12-month earnings (last four quarter operating profits is $1.82 per share), which is an awfully high multiple for a company that just reported 2% profit growth. Still, the stock is likely to get a boost because they beat estimates by 7 cents, and has strong momentum. Short-term, JBL looks good, but at these multiples, a lot of the likely growth may already be in the stock price. A lot of the expected growth next year is already in the price, and the easy money has been made. Like the semiconductor stocks, JBL has risen in anticipation that worst is over and that the future is bright. Good news is needed just to maintain the past stock price gains.
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