Flextronics International (FLEX) Message Board

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Technology Stocks : Flextronics International (FLEX)

FLEX 58.40

-0.6%

9:42 AM EST

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To: solderman.com who wrote (544)	2/15/1998 2:36:00 AM
From: kolo55	Read Replies (2) of 1422

Flextronics not as diversified as DIIG yet. Flextronics still has a strong reliance on Ericsson, and DIIG doesn't have a single customer that contributes more than 20% of sales. Also DIIG has more diversification among industry sectors. Dovatron contributes about 60-70% of revenues, but in the last Q $10M of $25M in operating income (about 40%) as Dovatron's margins are lower. The expansion of the Texas plant acquired from IBM should further reduce the percentage of sales due to Dovatron. But I believe Orbit and the smaller high margin subsidiaries are intrinsicly more risky than the basic ECM business. I like DIIG, but FLEXF is situated strategically where they need to be to prosper over the next five years. OTOH, DIIG is selling about 15 times calendar 98 earnings (based on consensus estimates), and FLEXF is selling almost 17 times calendar 98 earnings. But I think FLEXF has a good chance to substantially beat the consensus estimates. It would be prudent to own both here, and I do, but I expect more out of Flextronics over the next two years. Paul

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