Thomas Weisel Sees Buying Opportunity for Outsourcing ..
by: amkr_investor 5/17/00 10:58 am
Msg: 13524 of 13526
Thomas Weisel Sees Buying Opportunity In Tech Outsourcing (AMKR)
(NewsTraders.com)--Thomas Weisel Partners analyst Jim Savage said today he sees a "huge" buying opportunity in shares of electronics manufacturing services and semiconductor assembly and test leaders, including "strong buy"-rated Amkor Technology (AMKR) and Flextronics (FLEX), which he feels have been caught up in the "indiscriminate" tech sell-off.
"Even with the uptrend in the market late last week, top tier outsourcers with consistent 30% + historical growth and improving fundamentals are now selling at a significant discount to growth," Savage commented.
On a more general basis, Savage pointed out that outsourcing is counter-cyclical, as historically, slowing and uncertain end-markets have driven higher levels of outsourcing; based on such facts, the analyst feels that current market leaders have a chance to dramatically increase their market share in the next three years.
End markets continue to be strong in the analyst's view, and he feels telecom giants like Nokia (NOK), Marconi and Alcatel (ALA) will follow the lead of other OEMs and begin to aggressively outsource, a trend he expects Japanese OEMs to also follow within the next 12 to 18 months.
Concerning the one potential fly in the ointment, the components shortages currently affecting some parts of the market, Savage thinks the purchasing power of top-tier OEMs and their equipment manufacturing services partners will bring preferential purchasing leverage.
In addition, the analyst suspects that major outsourcers are already negotiating with suppliers to reserve capacity, thus insulating them from any shortage.
Other electronics manufacturing services, or EMS, and semiconductor assembly and test, or SATs, companies falling on Savage's leaders list were Jabil Circuit (JBL) Sanmina (SANM) SCI Systems (SCI) and Solectron (SLR), all of which he rates "strong buy." |
