RIMM Loves This Company – So Should You?
We’re at the point in the business cycle, Cramer said Tuesday, where electronic-manufacturing-services stocks make “fabulous buys.” These companies typically suffer high fixed costs and lower margins, but not when the economy’s recovering. As consumers gain confidence, they spend money on electronics, and that generates increasing demand for the products the firms make.
EMS companies handle component building that’s been outsourced by the likes of Sony, Research in Motion , Hewlett-Packard and others. Instead of manufacturing their own wares, the big boys pay a fee to have it done for them. Then a Nokia or a Dell will slap their brand name on the phone or laptop to make it their own. Given the turn in the economy and technology’s leadership in the move, Cramer thought it was time recommend an EMS play.
But he wouldn’t endorse the entire industry. Cramer wanted to know which company was the best. So he studied the charts and reviewed the fundamentals of the major players – Flextronics , Jabil Circuit , Sanmina-SCI , Celestica and Benchmark Electronics – to find his top pick. Watch the video for Cramer’s full report.
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