South America
Zacks Industry Outlook Highlights: BWX, Fabrinet, and OSI Systems
• Zacks Electronics – Miscellaneous Components industry faces challenges due to global macroeconomic environment, geopolitical tensions, and foreign currency headwinds.
• Industry players like BWX Technologies, Fabrinet, and OSI Systems are benefiting from automation drive and increased spending by manufacturers of semiconductors, automobiles, machinery, and mobile phones.
• The adoption of Artificial Intelligence (AI) and the democratization of IoT are transforming robotics, industrial automation, transportation systems, retail, and healthcare.
• Easing supply-chain constraints are benefiting industry participants.
• The industry caters to various end markets including telecommunications, automotive electronics, medical devices, industrial, transportation, energy harvesting, defense and aerospace electronic systems, and consumer electronics.
• Trends shaping the future of the industry include automation boom, miniaturization, geopolitical tensions, and the industry’s Zacks Industry Rank.
• The industry is housed within the broader Zacks Computer and Technology sector and has underperformed the Zacks S&P 500 composite and the broader Zacks Computer and Technology sector in the past year.
Electronics – Miscellaneous Components Industry Valuation
• The industry is currently trading at 20.69X, compared to the S&P 500’s 22.12X and the sector’s 27.02X.
• The industry has traded as high as 22.68X and as low as 20.05X in the past five years, with a median of 21.18X.
3 Electronics – Miscellaneous Components Stocks to Buy
• Fabrinet: Zacks Rank #1 (Strong Buy) stock, benefiting from strong telecom revenues and increasing demand for data center interconnect products.
• BWX Technologies: Zacks Rank #2 (Buy) company, riding on strong demand for nuclear technologies in end markets like federal, clean energy, and medical.
• OSI Systems: Vertically integrated designer and manufacturer of specialized electronic systems and components, primarily used for critical homeland security, healthcare, defense, and aerospace applications.
• OSI Systems has returned 19.4% in the year-to-date period, with the Zacks Consensus Estimate for 2025 earnings revised upward by a couple of cents to $9.22 per share over the past 30 days.
Note: Past performance is no guarantee of future results. This material is provided for informational purposes only and does not constitute investment, legal, accounting, or tax advice.
