Plexus Corp. PLXS hit a new 52-week high of $45.75 in Friday’s trading session, closing at $45.46.
The company’s shares have been rising since it reported decent second quarter fiscal 2015 results on Apr 22, having gained nearly 4% so far. In the year-to-date time frame, Plexus has returned over 10.3% compared with the S&P 500’s return of 3.3% and Russell 2000’s return of 3.9% in the same period.
The company witnessed a modest second quarter with earnings coming in line with estimates and revenues exceeding expectations. During the quarter, the company won 25 programs in its Manufacturing Solutions group. Plexus anticipates these wins to generate approximately $209 million in annualized revenues once production commences.
Plexus had opened its new manufacturing facility in Guadalajara, Mexico last year. Such consolidations of the company’s production facilities in low-cost areas are enhancing its margins.
We believe the new program wins in the networking/communications, industrial/commercial and health care/life sciences sectors and global expansion will drive growth over the long term.
Recently, Plexus was awarded the Supplier of the Year 2014 title by GE Healthcare,a subsidiary of General Electric Company GE. Plexus is the largest provider of sophisticated electronics manufacturing and engineering solutions for GE Healthcare. The company provides, high-tech assemblies for advanced imaging equipments including magnetic resonance imaging (MRI), computed tomography, X-Ray and ultrasound scanners as well.
Echoing similar sentiments, over the last 30 days, the Zacks Consensus Estimate for 2015 and 2016 earnings per share increased 0.7% and 1.5% to $2.99 and $3.57, respectively.
However, a mature electronic manufacturing services market and intense competition from the likes of Jabil Circuit JBL and Flextronics FLEX can pose challenges for this Zacks Rank #2 (Buy) stock.
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