Flextronics International Ltd. (FLEX), Jabil Circuit, Inc. (JBL): An Apple Inc. (AAPL) Flop Could Mean Double-Digit Gains For These 2 Stocks

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Our PEG ratio model shows this stock is slightly undervalued based on expected earnings for this year and about 25% undervalued based on next year’s expected earnings. With average EPS growth expected to be about 11% a year, Jabil Circuit, Inc. (NYSE:JBL) would be worth $24.75 based on this year’s expected earnings of $2.25, and $29.48 based on next year’s $2.68.

The stock is also a market leader with an RS rank of 100.

A low-priced call option could be the best way to trade Jabil Circuit, Inc. (NYSE:JBL). A call option gives buyers the right, but not the obligation, to buy 100 shares of stock at a predefined price (the strike price) at any time before the option expires. Buyers can also sell their option at any time prior to expiration to lock in a profit or limit a loss.

A call option on Jabil Circuit, Inc. (NYSE:JBL) expiring in March 2014 with a strike price of $26 is trading at about $1.10 a share. If the stock reaches $28, this option would be worth at least $2, offering a potential return of 82% in six months. The maximum loss when you buy a call is the price paid for the option, but a stop-loss can be used to limit losses.

Action to Take –>

— Buy JBL March 2014 26 Calls at $1.25 or less

— Set stop-loss at $0.60

— Set initial price target at $2 for a potential 60% gain in six months

This article originally appeared at ProfitableTrading.com
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