Why Sanmina Corp. Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sanmina  (NASDAQ: SANM  ) spiked by 11% this morning after the electronics manufacturing services specialist's quarterly results and outlook topped Wall Street expectations.

So what: Sanmina shares have soared over the past year on a string of market-topping quarters, and today's strong third-quarter results -- adjusted earnings per share increased 32.5% on revenue growth of 7.4% -- coupled with upbeat guidance only reinforce that positive trend. In fact, Sanmina generated about $152 million in operating cash flow while its non-generally accepted accounting principles operating margin increased 50 basis points year over year to 3.8%, suggesting that its competitive position continues to strengthen rapidly as well.

Now what: Management now sees fourth-quarter EPS of $0.50-$0.55 on revenue of $1.6 billion-$1.65 billion, versus the consensus of $0.51 and $1.58 billion, respectively. "Our investments in leading technology and capabilities offer differentiation in the market and value for our customers," said Chairman and CEO Jure Sola in a press release. "We continue to benefit from new programs and stable demand with key customers. Our previous expectation of modest growth in fiscal 2014 is achievable and solid execution of our strategy supports a promising future." When you couple Sanmina's still-hefty debt load with its red-hot and highly volatile stock price, however, I'd hold out for a much wider margin of safety before betting too heavily on that bullishness. 

1 way to profit from the stock market's biggest movers                               
Growth stocks pop and plunge on a daily basis, and weeding out the winners from the losers can seem daunting. The Motley Fool's Rule Breakers team can help. The team of analysts has uncovered high-growth stocks time after time, with Chipotle up more than 800% since its recommendation in 2007 and Baidu up a whopping 2,000% since its recommendation in 2006. Fortunately for you, the team believes it has found its next big winner. Click here for your copy of this timely report.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3038403, ~/Articles/ArticleHandler.aspx, 8/30/2015 4:17:25 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
SANM $19.51 Up +0.14 +0.72%
Sanmina-SCI Corp CAPS Rating: ****