Institutional Ownership Of Jabil, Inc Rises Ahead Of Earnings
Insiders have been selling shares of Jabil, Inc (NYSE: JBL) all year and those sales accelerated into the calendar Q4 period. Typically, this kind of activity would be a red flag for investors but there are a few things to consider. The primary is that shares prices have been trending strongly all year and reached 20-year highs over the summer providing a long-awaited opportunity to cash out some shares. Along with that are the broad-based nature of the selling, the low impact it had on share prices, and the company’s results. The results are far from bad and suggest the insiders are better off holding their shares to another later date.
On the flip-side, Insidertrades.com reveals the institutions have been net buyers all year and that trend persisted into the calendar 4th quarter. The only thing worth noting here is that activity among the insiders smacks of rotation, it has been subsiding, and the net ownership is above 90%. Analyst activity among the sell-siders has been sparse this year but is also bullish. The latest activity is a string of price target hikes and upgrades that has the stock rated a firm Buy and trading at $75. That’s worth about 15% to shareholders and compares with the broader consensus estimate of $66.70 (about 4% upside) and the recently set high price target of $90. Based on the latest results, we will not be surprised by additional bullish activity including new analysts’ coverage.
Jabil Has Strong Quarter, Guides Above Consensus
Jabil had a strong quarter driven by systemic demand for microchips, electronic components, and services related to their manufacture. Jabil, Inc reported $8.56 billion in revenue for a gain of 9.3% over last year’s 4.35% increase. The revenue was driven by strength in both operating segments and beat the consensus estimate by 340 basis points as well. The Diversified Manufacturing Solutions segment grew by 11% to outpace Electronic Manufacturing Solutions but it was up a still strong 7%.
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Moving down the report, the company was able to wide margins as well and produce earnings growth above consensus too. The company’s $1.63 in GAAP earnings is up $0.32 or 24% beating the consensus by a nickel while the adjusted $1.92 is up $0.32 from last year and beat by more than a dime. Looking forward, the company is expecting both revenue and earnings growth to continue despite a seasonally expected decline in business. The company is looking for revenue and earnings in a range with the midpoint above the consensus estimate as well, and we see upside risk in the numbers. Systemic demand for chips and chip manufacturing technology is very high and backlogs are growing in a number of industries that rely on them.
The Technical Outlook: Jabil, Inc Takes Stab At New Highs
Shares of Jabil, Inc opened the session following the earnings release with a small gain and then proceeded to advance more than 3.5% to set a new 20-year high. This is just short of the absolute all-time high near $67.70 and we see that level tested very soon. Assuming the market can follow through on the early action the stock should move up into the $67.70 range fairly soon and then possibly higher. A move above %67.70 would be incredibly bullish and open the door to much larger gains. If, however, resistance at the all-time high prevents a break out there may be a chance to get in again at the $64.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Jabil (JBL) | $131.73 | -0.9% | 0.24% | 11.95 | Moderate Buy | $143.50 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
