Contract manufacturer Fabrinet is firing on all cylinders, along with other electronics manufacturers. Fabrinet stock hit an all-time high in January and it's working its way back up toward a fresh high, and could shortly top it. Its closed higher the last six weeks in a row.
On Tuesday, the IBD SmartSelect Composite Rating for Fabrinet stock climbed from 92 the day before to a near-best 96 out of 99.
Fabrinet In Top 4% Of All Stocks
The new rating is a sign Fabrinet stock is outpacing 96% of all stocks when it comes to the most important stock-picking criteria. Winning stocks often have a 95 or higher score in the early stages of a new price run, so that's an important benchmark to look for when looking for the best stocks to buy and watch.
And it's not alone. Electronic contract manufacturer Flex is flirting with a buy point and St. Petersburg, Fla.-based Jabil beat earnings views Tuesday and shot up more than 11%.
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Fabrinet makes switches, laser components and other devices for electronic systems manufacturers.
Among its other ratings Fabrinet stock has a 92 EPS Rating, which means its recent quarterly and annual earnings growth tops 92% of all stocks.
Its Accumulation/Distribution Rating of B shows moderate buying by institutional investors over the last 13 weeks.
Fabrinet stock is currently forming a consolidation, with a 281.79 entry. See if the stock can break out in volume at least 40% above average. Its shares edged up to 258.79 Tuesday.
Double-Digit Profits Expected This Quarter
In Q3, Fabrinet posted 5% earnings growth to $2.52 per share. The prior three quarters EPS rose 30%, 20% and 25%. Analysts polled by FactSet expect the company will return to double-digit earnings growth this quarter. Sales last quarter grew 19%, up from 17% in the prior quarter, to $871.8 million.
Fabrinet earns the No. 3 rank among its peers in the Electronics-Contract Manufacturing industry group. Celestica is the top-ranked stock in the group. The group itself ranks a strong No. 39 on IBD's list of 197 industries.
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