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Technology Stocks : DII Group, Inc.
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To: Jimbo Cobb who wrote (1725)10/15/1998 2:45:00 AM
From: kolo55  Read Replies (2) of 1845
 
Some great posts on the thread.

I think you guys have it pegged. The rumors about who lost the Nortel (Bay Networks) business announced last week by Jabil have been circulating. Eventually the business Jabil picked up should be at least $250M annually, so its a big deal. Since Bay outsourced mostly, its clear this business came from other ECMs, and we heard about 10 different ECMs. We still don't know if DII lost the business they expected, but its a good bet this press release was to get next year's earnings estimates down closer to likely reality.

Also the news on continuing problems at Orbit was expected. All in all, I suspect most of this bad news was already priced into the stock by some very knowledgeable people who follow this sector. It is possible that the stock won't fall much tomorrow. Look at Kent today after pretty bad earnings released last night. The stock had probably hit rock bottom, so just getting the bad news out in the open helps.

I soured on this stock when it became apparent that they really didn't know what they were doing with the Orbit business last February. But their recent expansion of the Multek bare PCB business in Austin, China, and Europe seems like an interesting counter-cyclical play. If the bare PCB pricing improves as the cycle turns soon, they will come out smelling like a rose. If not, well ...

Paul
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