This manufacturing stock made Josh Brown’s list as it gets ready for a big move higher
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Approximately 1 million years ago (1998), I spent an entire summer pitching a stock called Flextronics, an electronic contract manufacturer based in Asia. There was a whole group of these companies, with names like Smart Modular, Jabil Circuit and Sanmina — and they were going up. The PC revolution was creating gigantic companies like Compaq, Dell and Gateway, but these businesses were great at innovation and marketing, not manufacturing. Somebody had to gather all the components, assemble the machine, pack it in a box and ship it to Best Buy. That someone was probably one of these electronic contract manufacturers and we had an awesome story on our hands. These were all Nasdaq-traded companies and my old brokerage firm, Lew Lieberbaum (don’t ask) was making markets in them. This meant we had an inventory in these names and, therefore, a vested interest in unloading them to clients. But they were working big time and everyone was happy. And then the “Asian Contagion” hit, with global currencies melting down, then-Federal Reserve Chair Alan Greenspan instituting an emergency rate cut and the young stockbroker Josh Brown learning how to get clients to meet their margin calls. This was less fun. I was 21 years old listening to grown men cry on the phone. Thirty years have gone by and only a handful of these companies are still around. Today we’re going to tell you about the king of the contract manufacturers, which once upon a time went by Flextronics (I know, it sounds like a stock Christopher Moltisanti would be pitching) but is now known as Flex LTD (FLEX) . A lot has changed in the space, as Flex has gone from rapid-fire consumer electronics assembly to longer-cycle, more strategic work for its customers. Flex designs, builds and sources electronics for over a thousand companies from Cisco to Hewlett-Packard, Apple to Tesla. The company supplies automotive electronics, medical devices, industrial equipment and data center infrastructure to every major technology firm around the world. They’re deeply embedded in the global supply chains and have been migrating upstream in terms of their importance to product design. This mix shift is the real story and how the stock is different from what people like me remember. Flex breaks the business into two segments, but what matters is Flex Reliability Solutions, or FRS. This is the good stuff. Long-cycle, high-value programs in automotive electronics, medical devices, industrial equipment and data center infrastructure. These are multiyear relationships where Flex is helping design, build and manage critical components, not just assembling them. The other segment, Flex Agility Solutions, is more consumer and short-cycle work. Faster turns, more competition, lower margins. That’s the old Flex. Wall Street is rediscovering many old tech names from the 1990’s that have been quietly biding their time, waiting patiently for this new cycle. The list includes Western Digital , Sandisk , Ciena , Corning and Dell — all names we’ve been talking about here on the Best Stocks in the Market list over the last year as they’ve been going wild thanks to the data center capex theme. Flex can be added to this list — you’re not shipping any of the physical tech needed to justify $700 billion in annual AI capex without their involvement. Incorporated in Singapore but managed from Austin, Texas, this company is HALO, time-tested, global and critical for the largest players in the game. Sean’s going to fill you in on the fundamentals and then I will be back to show you the breakout and how I would play it. Somewhere in Broker Heaven, the gods are smiling down at me as I resurrect one of my old stock pitches just for you. Best Stock Spotlight: Flex Ltd. (FLEX) Sean — Flex is a contract manufacturer. They essentially build products for other companies on a contracted basis. They work with a variety of brands across automotive, healthcare, industrial, communications and data center applications. The single biggest fundamental driver is of course AI and the data center buildout. Flex manufactures power systems and networking hardware for hyperscalers and data center operators. Their data center segment grew 50% year over year, and they guided to 35% growth for the next year. Flex’s data center manufacturing carries a higher margin than their other manufactured products, and with cloud-related products becoming a larger and larger share of their revenue, earnings have improved. Gross margin nearly doubled from 5.5% in 2020 to 8.4% in 2025. Flex has grown their EPS an impressive 51% a year and reduced their sharecount by 27% the past eight years. Flex’s management team has been explicit about their use of buybacks as free cash flow grows, and it has sent the stock higher every year the past decade except for 2018, representing an annualized 23% the past 10 years. Looking forward, they expect to report 9% revenue growth and 20% earnings growth for their next report in May. Risk management Josh — Flex is doing what strong stocks do at highs. It pushed to $73 and instead of backing off, it’s holding tight and building a base right at the breakout level. The trend is intact. Price is above a rising 50-day around $64 and a steadily climbing 200-day near $59. You’ve got higher lows underneath and no real signs of distribution. RSI at 62 confirms momentum without being stretched. There is a gap below from the early March move, roughly in the $66 to $68 area. That’s your first real test if this pulls back. Strong stocks don’t have to fill gaps, but if it does, how it behaves there will tell you everything. Hold that zone and it’s just a routine shakeout. Lose it and now you’re talking about a move back toward the 50-day. For traders, risk is the 50-day at $64 on a closing basis. For investors, it’s the 200-day near $59. Above $73, this resolves higher. But even if it pauses, tight action at highs with a gap below acting as support is exactly how sustained trends continue. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. 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