Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: Paul Senior who wrote (2457)	10/27/2000 11:11:09 PM
From: rich evans	of 2542

Would disagree re ACTM having been the lead plaintiff in the old class action lawsuit on inventories. "It changes and remains the same." However one of its peers I am more positive about. Namely BHE BHE has not held up well with the NAZ correction but then its larger competitors have come down substantially also like JBL, FLEX, SCI. SLR seems to have held up the best. But BHEt is one of the cheapest ECMs on a PSR basis and with earnings estimates of 2.20 plus for next year , it seems a good buy. I don't think it will do the 41 cents next quarter though as margins are staying at 7.4 percent gross according to cc for 2 quarters before moving up. Revs are doing nicely though with 460 for last quarter versus original 430 estimate and 500 for Q4, which I think could be low depending on how fast the new customer and programs ramp. All in all , this stock seems safe and undervalued based on its growth projections both year to year and sequentially.Still long and strong and thinking this stock will recover with the rest of the ECMs. SGA is supposed to stay at around 3.4% Cash EPS with 3mill a quarter amort is much higher and is how Flex and others report. Interest is coming down . They are not breaking out AVEX anymore because of loading all the plants together. CaP utilization is 72% overall. Growth next year is 35% if 2.3 bill is reached and could be higher to 2.5 bill especially if there is another acquisiton..Debt is down to 204 mill and 80 of it is the convertible.Good customers with EMC and LU and Sun the top 3. So they are part of the optical assembly programs with their new plants in Mass nad Virgina.Shares are up to 21.5 diluted.This company will be one of the winners in the ECM group IMO . Rich

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