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Top Picks 2020: Jabil (JBL)
01/10/2020 5:00 am EST
Last year, Richard Moroney selected Diodes (DIOD) as the Top Pick from his small-cap focused advisory service, Upside Stocks; the stock rose 69% and he still recommends the shares. For 2020, he turns to a technology manufacturing company.
Jabil (JBL)— a 2020 favorite for capital gains — has seen its shares surge 34% over the past six months, most recently rallying on robust November quarter results and guidance.
Earnings per share grew 17% to $1.05 excluding special items, versus the consensus of $0.93. Revenue climbed 15%. Results benefited from strength in health care, automotive, and industrial markets.
A leading provider of manufacturing services to technology companies, Jabil should benefit from the 2020 launch of long-awaited 5G iPhone from Apple (AAPL). For fiscal 2020 ending August, Jabil sees per-share earnings of $3.45 to $3.60, implying 16% to 21% growth.
Despite the upbeat outlook, Jabil shares trade at just 13 times trailing earnings, below the median of 17 for electronic-manufacturing services stocks in the S&P 1500.
If Jabil merely meets the low end of its full-year profit guidance and its trailing P/E rises to 15, the shares would reach $52 by late September. Jabil is rated a "Best Buy".
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