Seems like the H&Q conference is down on ECM sector.
Given the news release from the H&Q conference, suspect that the sector isn't getting a lot of positive press this week. At least, no apparent conference pop.
Regarding your note on Solectron expansion moves in Romania and Brazil. Add this to the major expansions in Mexico and China, and Solectron is clearly establishing large manufacturing campuses like Flextronics, only even bigger. I haven't run the numbers on what all these expansions mean, but I suspect this locks in a pretty good growth rate for Solectron.
Given that FLEXF is trading at an apparently higher multiple than many in the sector(other than SLR and SANM), I think the market is beginning to value Flextronic's excellent strategic plan. Now I think a few in the sector have to catch up a bit (JBIL), and Flextronics needs to let the analysts raise their consensus from $2.40 to something higher, before the shares will hold their next move up. (BTW, I can't get an earnings estimate of $2.40, given all the other guidance in the conference call. I expect $2.80, or better, in the 99FY started April 1.)
I'm still hearing lots of outsourcing rumors, especially regarding HP and Lucent. I suspect we will hear lots of announcements over the next two months, and some of the deals will be huge, over $500M.
Paul |
