When stock indices like the S&P 500 (SPY) approach all-time highs, investors have trouble finding prospective undiscovered stocks.
Lumentum (LITE), which designs optical and photonic products for networks, posted Q3/2024 results on May 6, 2024. Its revenue fell by 4.4% Y/Y to $366.5 million. In Q4/2024, the firm expects weak net revenue and operating margins as low as negative 3.0% (non-GAAP).
Patient investors need to wait for Lumentum to set up its qualification line in Thailand. As customers build their capacity outside of China, the firm should issue a better outlook.
Fabrinet (FN) gained 20.8% last week after posting non-GAAP EPS of $2.39. In Q4, it expects GAAP net income in the range of $2.01 to $2.08 a share. Despite softness in the telecom software sector, Fabrinet expects a growth rebound sometime in mid-2025.
In the automotive tire sector, Goodyear Tire (GT) may break out of its downtrend. The firm earned $0.10 a share (non-GAAP) after revenue fell by 8.1% Y/Y to $4.54 billion. The company could turn around under new management.
Activist investor Elliott Management will pressure Goodyear to optimize operations by cutting costs. Still, the firm, which supplies tires for Tesla’s (TSLA) Cybertruck, benefits from the industry’s consumer replacement cycle.
Goodyear issued a relatively flat Q2 outlook. In the latter half of 2024, industry growth would push its sales volumes upward.
