Analysts at B. Riley on Tuesday initiated coverage of Benchmark Electronics, Inc. (NYSE: BHE), Key Tronic Corporation (NASDAQ: KTCC) and Plexus Corp. (NASDAQ: PLXS) with Buy ratings.

Benchmark: Balanced Product Mix

B. Riley analysts initiated coverage of Benchmark Electronics with a Buy rating and $25 price target.

According to the analysts, Benchmark offers a "balanced mix" of exposure between tradition markets (such as enterprise computing and telecom equipment) along with higher growth markets (such as industrial/commercial, testing/instrumentation and medical devices).

The analysts also noted that the company's ROIC has been "steadily" improving to the point where it is in line with its weighted average cost of capital. As such, the analysts think there exists upside to the stock.

Key Tronic: Buy Ahead Of Recovery

B. Riley analysts initiated coverage of Key Tronic with a Buy rating and $15 price target.

According to the analysts, Key Tronic's "depressed" margins are the result of a pullback in two major customers. However, the analysts suggested that revenue for these customers will "bottom" in the June quarter and investors should be buying shares in anticipation of a gross and operating margin recovery.

In addition, the company's recent "significant" acquisition in September 2014 should be set to contribute revenue and cost synergies beyond the June quarter.

Looking forward, the analysts are estimating a 140 basis point improvement to its gross margins in fiscal 2016 as well as a 190 basis point improvement to its operating margin over the same time period.

Plexus: Attractive Margins

B. Riley analysts initiated coverage of Plexus with a Buy rating and $47 price target.

According to the analysts, Plexus ranks as having one of the highest margins of any pure-play electronics manufacturing services company. In addition, the company's business model allows for "aggressive" revenue growth and return on invested capital.

Looking forward, the analysts noted the company's "more favorable" mix, higher utilization, cost reductions and improved working capital management will result in earnings per share and free cash flow growth.

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