Solectron Corp. (NYSE: SLR) jumped Thursday after it announced a 2-for-1 stock split and Merrill Lynch reiterated a "buy" rating.
Shares in the electronics manufacturing services company were up 3 1/8 to 87. The stock has been rising since Solectron met analyst estimates in the first quarter.
Merrill Lynch reiterated Solectron as a "buy," and said the recent sell-off was overdone. Shares sunk from 92.5 Wednesday after news Celestica Inc. (NYSE: CLS), a contract-basis electronics manufacturer struck acquisition and supply deals with International Business Machines Corp. (NYSE: IBM). The IBM deal will boost Celestica revenue by $1.5 billion a year.
Four days after the first quarter ended, Solectron closed its purchase of Smart Modular Technologies (Nasdaq: SMOD), which makes memory modules and cards, embedded devices and input/output products. The company has been delivering solid results, and has a strong customer base. Solectron makes servers for IBM (NYSE: IBM) and Sun Microsystems (Nasdaq: SUNW), and also makes gear for telecommunications companies such as Ericsson (Nasdaq: ERICY) and equipment vendors such as Nortel Networks (NYSE: NT).
The new stock resulting from the 2-for-1 split will be issued on March 8 to holders of record as of Feb. 23, 2000.