Jabil Circuit’s (NYSE: JBL) strong earnings and forecast has been a feature of financial media sites and networks all over the news today. The stock’s up almost 100% as I write from its all-time low of $9.03 back in March of this year, and has provided quite a lift today for most of the cell phone sector. If you would have bought JBL when it capitulated to an all-time low on huge volume back in March of this year, you would have been heavily rewarded today.
What does that have to do with the Spicy Pickle? Quite often the market proves over and over again the best time to buy stocks is when nobody wants them. Hence, the Pickle in the last two days appears to be a victim of nothing other than seller/sellers not wanting to own the stock any longer. The stock traded as low as $.69 cents this morning on slightly higher than average volume.
This would have thrown up a potential red flag to us if there were some significant corporate events that warrant the selling, but that simply doesn’t appear to be the case. If anything, maybe getting some of these anxious sellers out may end up being a good thing for SPKL shares in the future.
In other words, if you liked the Pickle as an investment prospect on Friday, then yesterday and today pose an even better buying opportunity for the long haul. It’s not much different than buying a product on sale when the product itself hasn’t changed. The Company continues to execute and we believe its growth plans are firmly intact.
Bottom line? My experience tells me the last few days will prove over time to have been a great buying opportunity for SPKL investors.
Excellent Post. I am currently out of the stock. Had wondered why the drop in PPS and I appreciate your post. Just as soon as I finish buying EFSF at .085 will will be a Pickle Holder again.
Thanks
Editor: A cool head in a tough environment. The most money is made by those who have the intestinal fortitude to go against the crowd and buy when everyone is wondering if the sky is falling. Consumer sensitive stocks in a recession are a tough place to be. When the cycle changes, these stocks will probably come back admirably. I’ll bet you make doubles and triples by the end of 2008.
Wasn’t it clear that buy recommendation should better be done after the summer selling? I have stopped to accumulate as the bottom at .80 was not a bottom at all in my opinion as long as summer holes are possible. So we are here. Are you ‘shure’ we might not go .60 ?
Thanks!
Editor: it is certainly possible the stock could go to $.60. I don’t know for sure. I do know historically the time to buy will be around the end of July and into early August if you are going to be a bargain hunter. October has consistently been the bear killer. This year we are up against a pretty nasty bear market and a recession. This is a US consumer stock, so we will have to hold our nose through this cycle to see the stock a lot higher.