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Sanmina Corporation (SANM)

This tech company beat earnings estimates by six cents in the last quarter. And in the past 30 days, seven analysts have increased their EPS estimates for the company.

Sanmina Corporation (SANM)
From Ford Equity Research Report

Sanmina is a provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. The company manages its operations as two businesses: Integrated Manufacturing Solutions, which consists of printed circuit board assembly and test, final system assembly and test, and direct-order-fulfillment; and Components, Products and Services, which include interconnect systems (printed circuit board fabrication, backplane and cable assemblies) and mechanical systems (enclosures, precision machining and plastic injection molding), as well as design, engineering, logistics and repair services.

Ford’s Strong Buy recommendation on Sanmina Corp. is the result of our systematic analysis on three basic characteristics: earnings strength, relative valuation, and recent stock price movement. The company has enjoyed a very positive trend in earnings per share over the past 5 quarters. In addition, recent analyst estimates for the company have been raised, and SANM has posted results that exceeded analysts’ expectations. Based on operating earnings yield, the company is undervalued when compared to all of the companies we cover. Share price changes over the past year indicates that SANM will perform in line with the market over the near term.

Ford’s earnings momentum measures the acceleration or deceleration in trailing 12 month operating earnings per share growth. While Sanmina Corp.'s earnings have risen from $1.59 to an estimated $1.94 over the past 5 quarters, they have shown acceleration in quarterly growth rates.

Sanmina Corp.'s operating earnings yield of 8.2% ranks above 86% of the other companies in the Ford universe of stocks, indicating that it is undervalued. Ford measures the relative valuation of each company against all other companies in our research universe. Operating earnings yield, an earnings-to-price ratio based on the last 3 quarters of operating earnings and the current quarter’s estimate, has proven to be the most reliable relative valuation measure.

Sanmina Corp.'s stock price is up 16.3% in the last 12 months, up 26.2% in the past quarter, and up 1.2% in the past month. This historical performance should lead to average price performance in the next one to three months.

Richard Segarra, CFA, Ford Equity Research Report,, 800-842-0207, April 29, 2016