Jeffrey,
From today's WSJ. It is nice to see a little ink for ACTM!
June 29, 1999 <Picture: [The Wall Street Journal Interactive Edition]>
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Computer Peripherals
By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL
Show me the storage.
<Picture: All-Star Analysts>In the turbulent world of computer peripherals, the best stock of 1998 turned out to be a maker of big storage systems that trumped several hard-disk-drive companies. But for the best overall performance, you had to look beyond peripherals to the underappreciated world of contract manufacturers that grind out parts and devices to order.
Mark Jordan of A.G. Edwards in St. Louis was the sector's top stock picker in 1998, thanks mainly to his focus on two little-known contract manufacturers and a component supplier. Mr. Jordan posted an 82% estimated return on his portfolio.
Mr. Jordan's top pick was Plexus, a Neenah, Wis., contract manufacturer that caters to the computer and networking markets. Plexus shares posted a 157% gain. He got similar results with a similar contract manufacturer -- ACT Manufacturing of Hudson, Mass. -- whose shares rose 104% in the fourth quarter, after a shaky performance earlier in the year.
"We had to be nimble in 1998, since we had an industry-correction cycle" in the first part of the year, says Mr. Jordan, 46 years old, a two-time All-Star who also won an award for stock picking in the computer-services category. "These companies are very viable within their industry, and I had a kind of blind faith that, if we hadn't seen the worst, we were close to the bottom and that the market would bail us out."
Mr. Jordan's third pick, Hadco, isn't a contract manufacturer, but a maker of the green circuit boards that are ubiquitous in electronic devices. Its shares posted a 34% gain between his recommendation last August and year end.
For the current year, Mr. Jordan still favors ACT Manufacturing, which in May agreed to acquire CMC Manufacturing. That merger, the analyst says, should give ACT a much broader geographical presence, allowing it to join a "higher peer group" and diversify its customer base. |
