Why Sanmina Corp. Shares Soared

Is this meaningful or just another movement?

Jul 22, 2014 at 10:08AM

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. 

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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