Sanmina is one of those companies that work in the background to enable all the electronic gadgets we use, like smartphones, laptops and ear buds. The electronics sector has been rising, and on Tuesday the Relative Strength Rating for electronics contract manufacturer Sanmina stock climbed to 71, up from 64.
The 71 Relative Strength Rating means Sanmina stock is in the top 30% of stocks for price performance over the past year. Research shows that the market's biggest winners often have an 80 or higher RS Rating in the early stages of their moves. See if Sanmina can continue to show renewed price strength and clear that threshold.
Looking For The Best Stocks To Buy And Watch? Start Here
Sanmina Stock Composite Rating Among Top 12%
Meanwhile, Sanmina's other ratings are top-notch. It boasts a 98 Earnings Per Share Rating out of a best-possible 99. Its Composite Rating, a composite of five key technical and fundamental metrics, is a strong 88. Its SMR Rating (sales + profit margins + return on equity) is a bullish B on an A-to-E scale with A tops. It owns a C Accumulation/Distribution Rating, which shows that about as many funds are buying its shares as selling.
The Biden administration is concerned that unsteady relations with China could interfere with the manufacture of electronic gear that consumers and the U.S. military use. The government is supporting the onshoring of manufacturing and has said it will commit billions to enable U.S. electronic manufacturing to thrive.
That augurs well for Sanmina, which is at the heart of the American electronics industry, and Sanmina stock. The watchlist candidate makes components including circuit boards, cable assemblies, enclosures and others. It also provides various services including design, manufacturing and repair for high-tech systems makers.
The San Jose, Calif.-based company reported 51% year-over-year earnings growth in its most recent report, to $1.59 per share, on a 21% increase in revenue to $2.32 billion. The prior three stanzas it reported EPS growth of 31%, 58% and 59%. It posted strong gains in sales during that time as well.
Working On A Consolidation Pattern
Sanmina stock is working on a consolidation with a 69.28 buy point. See if the stock can clear the breakout price in volume at least 40% above average. Note that it's a third-stage base. Such patterns do sometimes lead to significant gains, but, statistically, they're more likely to fail than earlier-stage consolidations. On Tuesday it rose 1.8% to 57.52.
Sanmina stock earns the No. 7 rank among its peers in the Electronics-Contract Manufacturing industry group. Fabrinet and Kimball Electronics are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary Relative Strength Rating tracks price performance with a 1 (worst) to 99 (best) score. The grade shows how a stock's price performance over the trailing 52 weeks compares to all the other stocks in our database.
Please follow James DeTar on Twitter @JimDeTar
