COMS & the Ghost of USRX w/ other STUFF Message Board

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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF

COMS 0.00130

-18.8%

Nov 7 11:47 AM EST

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To: Jeffery E. Forrest who wrote (10090)	12/4/1997 9:19:00 AM
From: Moonray	Read Replies (2) of 22053

GOATS Contract manufacturer Jabil Circuit (Nasdaq:JBIL - news) got burned for $4 to $42 9/16 today after 3Com Corp. (Nasdaq:COMS - news) announced that its second quarter will not meet expectations because the company is cutting shipments to distributors in order to reduce inventories. As of the fiscal year ended August 31, 1997, 3Com accounted for 21% of Jabil's net revenues, followed by 20% from Cisco Systems (Nasdaq:CSCO - news). 3Com is also a large customer of upstream manufacturer Solectron Corp. (NYSE:SLR - news) . Networking represents 30% of Solectron's business, but 3Com is not its largest customer. Solectron was cut for a $4 7/16 loss to $33 5/16 anyway. Short of a complete cancellation of orders, it is precisely this type of event that scares investors in the contract manufacturing arena the most. However, both Jabil and Solectron are efficient operators with high inventory turns and low day sales outstanding. Assuming that the channel stuffing that 3Com engaged in smoothes out through the holidays, neither company should be significantly off pace in 1998. fool.yahoo.com o~~~ O

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