Sell: Jabil Circuit (JBL)
From Dow Theory Forecasts
Updated from WSBI 775, November 18, 2015
Jabil Circuit (JBL) is being removed from the Buy and Long-Term Buy lists. The shares tumbled 11% when management warned last month that May-quarter results would fall well short of expectations. We wrongly thought the stock was due to bounce, given its unusually cheap valuation. But it shows no signs of getting off the mat, falling an additional 6% since the warning, while the S&P 1500 Index has risen 2%
The Quadrix® Overall score has slumped to 62 from 92 at the end of February, a level too low for a Buy-rated stock unless we see specific reasons why Quadrix may be wrong. However, cash from operations has fallen in each of the past two quarters, while analyst estimates continue to deteriorate. We are dropping Jabil from coverage. The stock should be sold.
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233- 5922, April 18, 2016