RBC Capital Markets analyst Amit Daryanani recently issued a research note (that’s probably not available to you or I) taking a look some of the Apple (NASDAQ: AAPL) iPhone supplier stocks that we know about, namely Amphenol Corporation (NYSE: APH), Flextronics International (NASDAQ: FLEX), Jabil Circuit (NYSE: JBL) and Molex Incorporated (NASDAQ: MOLX). I say “that we know about” because obviously Apple (AAPL) is fairly tight-lipped about who its suppliers are and not just because of pesky activists who are concerned about labor conditions at supplier factories. After all, competitors are nipping at Apple’s (AAPL) heals plus there is the potential for corporate espionage and leaks (then again and since the passing of Steve Jobs, Apple has been leaking info like a sieve with employees dropping iPhone prototypes all over town but that’s digressing….).
However, Amphenol Corporation (APH), Flextronics International (FLEX), Jabil Circuit (JBL) and Molex Incorporated (MOLX) are a few of the names that have emerged as being iPhone 5 supplier stocks. Hence and as an investors, should you chase these Apple iPhone supplier stocks for the long term? Here is a quick look at all four:
Amphenol Corporation (NYSE: APH). A designer, manufacturer and marketer of electrical, electronic and fiber optic connectors, interconnect systems and coaxial and high-speed specialty cable, Amphenol Corporation provides Apple with connectors. Specifically, Taiwan’s Cheng Uei Precision Industry (TPE: 2392) is estimated to have 55% of Apple’s connector business while Amphenol Corporation is estimated to have around 105 of it according to UBS analyst Steven Milunovich. Meanwhile, RBC Capital Markets estimates that Amphenol Corporation gets about 2.5% of its revenue from Apple and will only benefit modestly from the Apple iPhone 5. On Thursday, Amphenol Corporation fell 0.83% to $61.89 (APH has a 52 week trading range of $38.98 to $63.70 a share) for a market cap of $9.96 billion plus the stock is up 36.3% since the start of the year and up 65.9% over the past five years. Amphenol Corporation does pay a dividend but its forward dividend is $0.42 for a dividend yield of just 0.70%.
Flextronics International (NASDAQ: FLEX). As a global provider of vertically integrated advanced design and electronics manufacturing services (EMS) to original equipment manufacturers (OEMs), Flextronics International designs, builds, ships and services electronics products for its customers through a network of facilities in 30 countries across four continents. Flextronics International gets around 2.5% of its revenues from Apple through sales of power-related components. On Thursday, Flextronics International fell 1.12% to $6.17 (FLEX has a 52 week trading range of $5.32 to $7.49 a share) for a market cap of $4.11 billion plus the stock is up 9% since the start of the year but down 47.7% over the past five years. Flextronics International pays no dividend but the company has recently announced a share repurchase plan of up to 10% pursuant to a limitation under Singaporean law.
Jabil Circuit (NYSE: JBL). A provider of worldwide electronic manufacturing services and solutions, Jabil Circuit provides electronics design, production, product management and aftermarket services to companies in a wide range of industries. Jabil Circuit is involved in the design and manufacturing of the iPhone casings and RBC Capital Markets has noted that the new aluminum unibody casing with a glass screen bodes well for the company’s specialized services. Moreover, Jabil Circuit gets about 10% of its revenue from Apple and RBC Capital Markets says that the company stands to benefit most notably in its November and February quarters. Otherwise, its worth noting that Jabil Circuit will be reporting earnings next Tuesday and despite expectations of a 7.4% drop in net income, Wall Street remains optimistic about Jabil Circuit. On Thursday, Jabil Circuit fell 0.86% to $21.95 (JBL has a 52 week trading range of $15.65 to $27.40 a share) for a market cap of $4.51 billion plus the stock is up 11.6% since the start of the year but down 6.2% over the past five years. Jabil Circuit also has a forward dividend of $0.32 for a dividend yield of 1.4%
Molex Incorporated (NASDAQ: MOLX). Molex Incorporated specifically manufactures electronic connectors. RBC Capital Markets estimates that Molex Incorporated gets about 5% of its revenue from Apple and its providing multiple electronic connectors for the iPhone5. Hence, RBC Capital Markets expects Molex to achieve its target of 8% to 10% revenue growth for fiscal 2013. As with Amphenol Corporation, Molex Incorporated is estimated to have around 10% of Apple’s connector business by UBS analyst Steven Milunovich. On Thursday, Molex Incorporated fell 0.47% to $27.66 (MOLX has a 52 week trading range of $18.81 to $28.46 a share) for a market cap of $4.88 billion plus the stock is up 15.9% since the start of the year and up 5.4% over the past five years. Its also worth noting that Molex Incorporated has a forward dividend of $0.88 for a dividend yield of 3.2%.
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