In this case, we prefer the parent

Article Excerpt

The shares of contract manufacturer Flex (formerly called Flextronics International) traded in a narrow range for most of the past 10 years. However, the stock started to move up in late 2022 when the company announced that it would spin off its solar panel tracking business, called Nextracker. As with most spinoffs, we feel this split will ultimately benefit both companies. However, we feel the former parent is the better pick right now due to its wider range of products. FLEX LTD $28 is a buy for aggressive investors. This Singapore-based company (Nasdaq symbol FLEX; Manufacturing sector; Shares outstanding: 421.2 million; Market cap: $11.8 billion; No dividend paid; Takeover Target Rating: Medium; www.flex.com) makes products on a contract basis for communications, computer, wireless and information technology firms. The company has two main businesses: Flex Agility Solutions (54% of revenue, 52% of earnings) focuses on customers in the telecommunications, computer networking, home appliances and consumer electronics industries; and Flex Reliability Solutions (46%, 48%) makes products for customers in…