Apple Inc. (AAPL), Jabil Circuit, Inc. (JBL): A Cheap Semiconductor Stock That You Shouldn’t Miss

The company’s Enterprise & Infrastructure segment turned in yet another impressive performance in the previous quarter, growing 12%. This business has displayed remarkable strength even in a tepid spending environment, and should continue to get better this year as carrier spending resumes.

Gaining velocity

It seems that Jabil’s High Velocity segment, which accounts for around 20% of the top line, is also getting better finally. After shrinking for the past couple of quarters, Jabil now expects it to grow in the current one. Revenue from the segment dropped 15% in the previous quarter, a marked improvement from the 20% decline in the one before.

Revenue from the High Velocity segment is expected to be 13% better than last year in the ongoing quarter, probably driven by Jabil’s Research In Motion Ltd (NASDAQ:BBRY) account. Jabil was selected as a partner for the BlackBerry 10 initiative last year. Now that the BlackBerry Z10 has got off to a better than expected start, Jabil can look forward to more gains.

BlackBerry recently received an order for 1 million smartphones, has been approved by the German government, and Canaccord Genuity bumped up its sales forecast for the Z10 significantly. All these developments signal that BlackBerry is indeed relevant in the smartphone wars, and this is good news for Jabil Circuit.

The takeaway

Jabil Circuit, Inc. (NYSE:JBL) might have guided below Street expectations for the ongoing quarter, but it expects growth to be back in full swing from the next quarter. The company is investing in capacity expansions, has solid customers, and is pretty cheap. All these factors make Jabil Circuit an interesting proposition at current levels.

The article A Cheap Semiconductor Stock That You Shouldn’t Miss originally appeared on Fool.com and is written by Harsh Chauhan.

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