Why Sanmina Stock Just Got Sacked

Core Viewpoint - Sanmina is experiencing growth through a major expansion in its Energy business, but this growth is leading to investor disappointment due to concerns over profit sharing and potential cash flow issues in 2026 [1][4]. Group 1: Expansion Plans - Sanmina plans to open a new state-of-the-art factory in Houston by 2027, targeting the U.S. energy market and producing high-quality energy products such as medium-voltage distribution transformers [2]. - The company has signed an agreement with Croatia's Koncar Electrical Industry to co-design a custom medium-voltage transformer for the U.S. market [2]. Group 2: Financial Performance and Concerns - Sanmina reported earnings of $4.46 per share last year, with expectations for growth in the current and next year [4]. - Analysts predict that Sanmina could experience a cash burn of up to $98 million this year and potentially $288 million next year, raising concerns about its financial health [5]. - The stock is currently priced at 35 times earnings, which may indicate it is overvalued, especially if cash flow issues persist [8].