This Underrated AI Stock Is Up 53% in the Past Year

• Sanmina (SANM) hit a new 52-week high on Monday, July 7.
• The stock has a 100% “Buy” signal via Barchart.
• Shares are up 53% in the past year and 35% in the year to date.
• Despite technical strength, Wall Street analysts and major advisory sites rate SANM as a “Hold,” citing valuation concerns. 

Today’s Featured Stock:

Valued at $5.42 billion, Sanmina (SANM) is engaged in providing electronics contract manufacturing services. It focuses on engineering and fabricating complex components and on providing complete end-to-end supply chain solutions to original equipment manufacturers (OEMs). Particularly relevant for investors is the fact that Sanmina manufactures hyperscale data center infrastructure. 

What I’m Watching:

I found today’s Chart of the Day by using Barchart’s powerful screening functions. I sorted for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. SANM checks those boxes. Since the Trend Seeker signaled a buy on April 25, the stock has gained 24.31%.

SANM Price vs. Daily Moving Averages:

Barchart Technical Indicators for Sanmina:

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

SANM shares hit a new 52 week high on July 7, touching $103.10 in intraday trading. As of this writing they had retreated slightly and were trading 0.8% below the new high. 

• SANM has an 100% technical “Buy” signal.
• The stock recently traded at $102.23, above its 50-day moving average of $87.21.
• SANM has a Weighted Alpha of +54.51.
• The stock has gained 53.66% over the past year.
• SANM has its Trend Seeker “Buy” signal intact.
• Sanmina is trading above its 20, 50 and 100-day moving averages.
• The stock made 16 new highs and gained 17.29% in the last month.
• Relative Strength Index is at 78.87%.
• The technical support level is $101.19.

Don’t Forget the Fundamentals:

• $5.42 billion market cap.
• Trailing price-earnings ratio of 22.2x.
• Revenue is projected to grow 7.05% this year and 7.43% next year.
• Earnings are estimated to increase 11.68% this year and increase 19.82% next year.

Analyst and Investor Sentiment on Sanmina:

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like Wall Street analysts have very mixed feelings and some major advisory sites think the stock may be priced too high for further price appreciation.

• The Wall Street analysts tracked by Barchart issued three “Hold” opinions on the stock.
• Value Line gives the stock its above-average rating.
• CFRA’s MarketScope rates the stock a “Hold.”
• MorningStar thinks the stock is 9% overvalued.
• 5,880 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line:

Sanmina currently has momentum and is hitting new highs.

I caution that SANM is volatile and speculative — use strict risk management and stop-loss strategies.

Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.