IBD 50 Stocks To Watch: Contract Manufacturing Leader Jabil Offers New Buy Point

Tuesday’s IBD 50 Stocks To Watch pick, Jabil (JBL), is forming a new flat base, offering a new buy point amid today’s stock market sell-off. The stock declined more than 2% midday Tuesday and is battling to find support around a key area.


Stocks To Buy And Watch: Jabil

Florida-headquartered Jabil is a contract manufacturer of electronics and other products. The company makes products for a host of industries including computing, communications, consumer electronics, automotive and health care.

Key customers include Apple (AAPL), (AMZN), Johnson & Johnson (JNJ) and Tesla (TSLA).

In the most recent quarter, Jabil earned $1.30 per share on sales of $7.2 billion, representing year-over-year increases of 251% and 14%, respectively. Jabil boasts four quarters of accelerating earnings growth — a bullish fundamental metric.

“Our third-quarter performance was outstanding,” CEO Mark Mondello said in a news release. “The combination of strong demand and excellent execution by the team allowed us to deliver $277 million in core operating income on revenue of $7.2 billion.”

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Jabil ranks No. 44 in the IBD 50. (The IBD 50 is a list of leading growth stocks with strong relative price strength and top-notch fundamentals.)

The stock shows a strong 98 Earnings Per Share Rating and a solid B SMR Rating, according to IBD Stock Checkup. The EPS Rating tracks a company’s earnings strength. The SMR Rating analyzes a company’s sales, margins and return on equity, and offers a letter grade from A (the best) to E (the worst).

IBD Stock Checkup also shows that JBL stock offers a solid 93 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

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JBL Stock Eyes New Buy Point

Jabil stock is tracing a flat base that shows a 59.05 buy point, according to IBD MarketSmith chart analysis. Shares are looking to find support around their 50-day moving average amid Tuesday’s heavy stock market losses. Jabil shares declined more than 2% in midday trade.

Positively, the stock’s relative strength line shows it had market-leading strength in early June, as it continually hit new highs, a sign of stock market outperformance. The RS line is taking a breather in today’s stock market, which is perfectly normal with the stock in base-building mode.

But keep an eye on the RS line. In the event of a new breakout attempt, the RS line should hit a new high on the breakout day or shortly thereafter, reaffirming the stock as a market leader.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.


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