Mike, Perhaps you were a little early with puts on Solectron. After the close, the news headlines indicate that SLR will be added to the S&P 500 Index replacing Penzoil. That should guarantee a few points to the upside tomorrow.
Also, I was a little confused by your comment <<these 3 firms are growing at a rate of 2-7% per year, but selling at multiples of 40-60 times eps. >> Solectron's growth has been much higher. Earnings for the last two years have grown over 20% per year and in Solectron's just completed first quarter results, year-to-year EPS growth was over 42% and quarterly sequential growth was 14%. Revenues increased 71% year-to-year and 15% Sequentially.
Solectron's proxy also lists for shareholder approval, an increase in authorized shares for general purposes including sufficient amounts for a spit possibility. In the current market environment, a split may also add a few points to the total stock price.
I am long on SLR and have held the stock for years, so I see additional upside for the stock, at least until after the annual meeting which will determine whether or not a split is in the offing.
Prior to the recent news which may favorably affect the stock in the near term, I was also toying with the idea of playing puts or covered calls. I will now wait till January.
Regards,
Bob |
