Sanmina: How Watching Guidance Lead To This Profitable Trade
- Tracking management guidance and conference calls can give you hints of what is to come.
- Sanmina's quarterly performance was improving and management was optimistic about 2014.
- Management's credible historical guidance convinced me that the market would like 2Q14 results.
- This is a simple yet powerful example of a plain analysis that can be applied to other similar opportunities.
Sanmina-SCI: A Speculative Stock for Option Writers
Mon, Oct. 20, 1:31 PM
- With shares down 23% since Sep. 1 (vs. a 6% drop for the S&P), Goldman's Mark Delaney has upgraded Sanmina (SANM +3.7%) to Neutral, while keeping his $18 target intact.
- Though still seeing risk to calendar Q4 estimates, Delaney thinks the contract manufacturer now has a fair relative valuation, given shares trade at a 16% discount to peers on a forward P/E (2015E EPS) basis.
Fri, Oct. 10, 1:42 PM
- Following Microchip's warning and related prediction of a chip industry correction, Goldman's James Covello thinks there's 15%-20% downside in industry names.
- Covello, who lowered his industry view to Cautious in August: "The last time Microchip negatively preannounced was October 15, 2012 (3% sales miss). Between October 1 and December 31, Street 2013 sales estimates for the Semi group were revised down 6% on average."
- He adds several datapoints suggest the industry has been overheating. Among them: Semi revenue growth has outpaced end-market growth, and supply chain inventory dollars rose 3% more than their 3-year average in Q2.
- "Nobody will be spared," predicts Hedgeye's Craig Berger. Benchmark's Gary Mobley observes 5 of the 6 chip stocks to have made Q3 pre-announcements have thus done so to the downside.
- Worth noting: Mobile chipmaker Silicon Motion (SIMO -8.9%) is the one chipmaker to have positively pre-announced. It might not be a coincidence that Microchip has relatively low mobile exposure.
- Observing U.S. macro data remains positive even as China and Europe soften, Longbow's JoAnne Feeney remains bullish long-term on select names. However, she has cut her short-term rating on Linear (LLTC -3.8%) to Sell, and removed IDT (IDTI -7.1%) from her trading long list.
- In addition to the names previously mentioned, the following chip stocks are seeing steep losses: AMD -5.1%. FCS -13.6%. NXPI -11.2%. CODE -11%. LSCC -9.6%. SIMG -8.1%. IPHI -7.7%. ISIL -9.5%. CY -6.9%. RMBS -7.1%. QUIK -5.7%. SQNS -5.1%. IMOS -6.5%.
- Foundries and contract manufacturers are also selling off: TSM -3.9%. UMC -2%. SMI -2.4%. SANM -11.7%. FLEX -6.8%. JBL -4%.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mon, Jul. 21, 5:45 PM
- Sanmina (NASDAQ:SANM) expects FQ4 revenue of $1.6B-$1.65B and EPS of $0.50-$0.55, largely above a consensus of $1.58B and $0.51.
- CEO Jure Sola: "Each of our end-market segments grew on a sequential basis, with notable performance from our industrial, medical and defense segment."
- Gross margin +20 bps Y/Y to 7.9%. SG&A spend +1% to $63M, R&D +16% to $7.8M. $6M was spent on buybacks.
- FQ3 results, PR
Mon, Jul. 21, 5:38 PM
Mon, Jul. 21, 4:06 PM
Sun, Jul. 20, 5:35 PM
Wed, Apr. 23, 12:45 PM
Wed, Apr. 23, 9:17 AM
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Mon, Apr. 21, 5:35 PM
Wed, Jan. 29, 5:41 PM
- Flextronics (FLEX) expects FQ4 revenue of $5.9B-$6.3B and EPS of $0.18-$0.22. The midpoints to those ranges are favorable to a consensus of $5.97B and $0.19.
- The contract manufacturer also says it plans to cut jobs in FQ4. The cuts are expected to produce $30M-$35M in pre-tax charges, and yield $60M/year in cost savings.
- Rival Sanmina (SANM) +1.3% AH in sympathy. Sanmina's shares took off yesterday after the company posted mixed FQ1 results and provided in-line FQ2 guidance.
- Flextronics' Q4 results, PR
Tue, Jan. 28, 9:10 AM
Mon, Jan. 27, 7:05 PM
- Silicon Motion (SIMO) expects Q1 revenue to be flat to down 10% Q/Q vs.a consensus for a 2% decline. However, the company also expects 2014 revenue to be up 5%-15% Y/Y vs. a consensus for 5% growth. Shares +4.8% AH. (Q4 results, PR)
- STMicroelectronics (STM) expects Q1 revenue to decline 9.5% Q/Q (+/- 3.5%); that's worse than a consensus for a 7% drop. Shares unchanged AH for now. (Q4 results, PR)
- Sanmina (SANM) expects FQ2 revenue of $1.425B-$1.475B and EPS of $0.36-$0.42 vs. a consensus of $1.45B and $0.37. Shares +7.1% AH. (FQ1 results, PR)
Mon, Jan. 27, 4:09 PM
Mon, Jan. 27, 12:10 AM
SANM vs. ETF Alternatives
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