) reached a new 52-week high of $20.74 on Tuesday, Dec 24, 2013.
This was primarily driven by the company's strong optical
communications business and also its solid first-quarter 2014
The closing price of this optical packaging and electronic
manufacturing services provider on Dec 24 was $20.65. The price
represented a robust one-year return of about 52.5% and a decent
year-to-date return of around 58.7%. Average volume of shares
traded over the last three months stood at approximately
Fabrinet delivered positive earnings surprises in the last
four quarters with an average beat of 15.6%. This Zacks Rank #1
(Strong Buy) company has a market cap of $717.3 million and a
long-term expected earnings growth rate of 12.0%.
Fabrinet's Optical communications business one of its
strongest and the company is a market leader in this segment. In
the last reported quarter, this segment grew 12% sequentially and
was a significant driver for the op line growth. Given the
dramatic rise in demand for voice, data and video services
delivered over wired and wireless Internet protocol, the demand
for Fabrinet's optical communications components has also been
The company has a strong Turn-Key Supply Chain Management
System, whereby it has created a proprietary set of automated
manufacturing resources planning tools. These tools are specially
designed to address the unique inventory management demands of
low-volume, high-mix manufacturing.
Over the years, Fabrinet has developed strong relations with
suppliers and also implemented inventory management strategies
with many of its suppliers. Thus the company can obtain inventory
on an as-needed basis and provide on-site stocking programs.
Hence, this system allows Fabrinet to lower both costs and cycle
times for its customers.
Strong Q1 Earnings
Fabrinet reported first-quarter fiscal 2014 earnings per share
of 40 cents, 33.3% above the Zacks Consensus Estimate of 30
cents. Earnings also grew 11.1% year over year driven by strong
pipeline of new businesses.
Total revenue in the quarter increased 8.2% year over year to
$171.6 million from $158.6 million in the year-ago quarter. The
increment was primarily driven by rise in customer demand for the
optical communications manufacturing services during the
This apart, over the last 60 days, estimates for both 2014 and
2015 have been revised upward. This led to an 11.1% rise in the
Zacks Consensus Estimate to $1.50 per share in 2014. For 2015,
the Zacks Consensus Estimate advanced 10.7% to $1.66 per
Other Stocks to Consider
Other stocks in the electronics and miscellaneous components
industry that are currently performing well and have a good
AAC Technologies Holdings Inc.
). AAC and KEMET have a Zacks Rank #1 while CalAmp carries a
Zacks Rank #2 (Buy).
AAC TECH HLDGS (AACAY): Get Free Report
CALAMP CORP (CAMP): Free Stock Analysis
FABRINET (FN): Free Stock Analysis Report
KEMET CORP (KEM): Free Stock Analysis Report
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