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Jabil Circuit (NYSE:JBL) provides electronics manufacturing services to a wide variety of companies and industries, including automotive, aerospace, defense, healthcare, industrial, technology, and more. This company provides product design services, manufacturing, quality control, supply chain management, distribution, and logistics to many other companies around the world.

Shares of Jabil Circuit have been on a roller coaster ride over the past several weeks, and now (once again) appear too cheap to ignore. The stock was trading around $18.50 in July, then rose to about $24 in August only to drop back down to below $19 recently.

The stock dropped after the company reported financial results, which disappointed some investors. However, the drop in the stock price looks like a buying opportunity, especially since the company appears to be supplying parts for the new Apple (NASDAQ:AAPL) iPhone 5. A recent Barron's article sums up the short-term revenue miss and how it appears to be related to the iPhone 5 launch:

Jabil Circuit, which helps Apple with some product parts as an electronics manufacturing contractor, projected revenue this quarter to come in below expectations, and said its results last quarter were affected by 'a challenging new program ramp in our specialized services sector,' which analysts have attributed to the build of the iPhone 5.

For the fourth quarter ended Aug. 31, 2012, Jabil Circuit reported that GAAP operating income for the quarter was $144 million, or 39 cents per share. Excluding amortization of intangibles, stock-based compensation, and distressed customer charges, operating income was $175 million, or 54 cents per share, in core diluted earnings. The board of directors also said it has authorized the repurchase of up to $100 million worth of shares of the company's common stock during the next 12 months.

Analysts have pegged earnings estimates for Jabil Circuit at nearly $3 per share for the next couple of years. With the shares at just about $19 per share, the stock trades for just over six times earnings. That is cheap when compared to the overall market.

Key Data Points For Jabil Circuit:

  • Current Share Price: $18.90
  • 52-Week Range: $16.62 to $27.40
  • Dividend: 32 cents per share, which yields 1.5%
  • 2012 Earnings Estimate: $2.77 per share
  • 2013 Earnings Estimate: $3.16 per share
  • P/E Ratio: about six times earnings

Data is sourced from Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in JBL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: No guarantees or representations are made. Please consult a financial advisor before making investments.

Source: This Apple Supply-Chain Stock Is Now Too Cheap To Ignore