In this week's fourth-quarter report. Jabil showed 39% revenue growth year over year to $3.9 billion while GAAP earnings expanded from $0.03 per share to $0.27 per share. These impressive numbers weren't enough to impress a jaded analyst crowd that had expected stronger sales, but Jabil's stock bounced back from a steep overnight drop with conviction when investors started thinking about what's right with the company.
In a cutthroat sector with razor-thin margins all around, Jabil is trending in all the right directions and is well on its way to becoming a best-of-breed stock. Benchmark Electronics
But while all of these competitors are afflicted with slow, stalled, or shrinking revenue growth in 2010, Jabil beats the whole pack with ease. Furthermore, all of Jabil's margins are widening. "You're ugly and I'm fat, but I can lose weight." Yeah, it's like that.
The company is also simplifying its business divisions into a new three-part structure designed to reflect management goals: Focus on the high-growth segment known as diversified manufacturing while letting the high velocity and enterprise and infrastructure divisions pull the train forward with their sheer volumes of current business.
Jabil may look expensive next to its peers when judging by trailing earnings, but is very reasonably priced in terms of price to sales or forward earnings. The stock looks like a downright steal next to market darling Plexus
What does Jabil have to do to gain some respect? I'm doing my part by scooting over to rate the stock "outperform" for the next year or so, which should be enough time to turn the market's voting machine into a weighing instrument and give proper dues to Jabil's emerging profitability. Follow along in my All-Star footsteps if you like, or use the CAPS forum to tell me how I'm wrong.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.