Jabil Circuit (JBL) Message Board

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Technology Stocks : Jabil Circuit (JBL)

JBL 196.60

+2.1%

Nov 21 9:30 AM EST

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To: Finder who wrote (4696)	11/13/1998 10:53:00 AM
From: 18acastra	Read Replies (2) of 6317

JBL trading down in sympathy w/DELL is absolutely SILLY 1) Dell's numbers still showed good growth, which is all that is important for CEM 2) JBL will be making laptops for DELL. People were concerned with DELL's growth on the desktop side, not the laptop side, which grew 98% 3) DELL has 2x the P/E of JBL 4) JBL not even in production for DELL yet, that won't start until beginning of 1999 Investors need to understand that when you buy a CEM you are buying a portfolio of customers and into a secular outsourcing trend, so you are greatly diversifying risk. That is why I believe the CEM should trade at a premium multiple to OEM -> you are not betting on a single company, technology, market segment. Instead, you are diversifying risk by buying a portfolio of customers (that on avg. grows nicely), plus a huge long term trend of outsourcing. The price action on JBL the last 2 days in sympathy w/DELL shows me just how poor a lot of investors understanding about the industry still is. My opinion.

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