When Should You Buy Sanmina Corporation (NASDAQ:SANM)?

While Sanmina Corporation (NASDAQ:SANM) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$75.33 and falling to the lows of US$62.97. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Sanmina's current trading price of US$69.03 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sanmina’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Sanmina

Is Sanmina Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 1.1% below our intrinsic value, which means if you buy Sanmina today, you’d be paying a fair price for it. And if you believe that the stock is really worth $69.81, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Sanmina’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Sanmina generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Sanmina's earnings over the next few years are expected to increase by 37%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in SANM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SANM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - Sanmina has 1 warning sign we think you should be aware of.

If you are no longer interested in Sanmina, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.