Flextronics International (FLEX) Message Board

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Technology Stocks : Flextronics International (FLEX)

FLEX 63.55

-0.3%

11:09 AM EST

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To: Michael Anthony who wrote (1011)	1/14/1999 7:34:00 PM
From: kolo55	Read Replies (3) of 1422

I own both stocks, but have a much larger position in FLEX. I bought some DIIG when they were throwing it away for 10 just before the earnings announcement in October. DIIG has some skeletons in the closet that they are in the process of cleaning out- management made a serious mistake buying Orbit instead of growing their assembly business (Dovatron) through acquisition. Suggest you read and post on the DIIG thread (start with these posts): Message 6023442 Message 6072663 (I should note that this post incorrectly understates the cost of the two new Multek acquisitions.) Message 6072801 Message 6131526 Flextronics is in a whole different situation. Its assembly business is running at a $2B run rate, almost three times Dovatron's run rate. Flextronics is the largest assembler in Europe, one of the fastest growing regions for outsourcing in the world. Flextronics is at the table for new deals. I believe Flextronics can grow 50% plus easily over the next several years(even EPS could possibly grow this fast), while DII is likely a 20-25% grower. FLEX should trade at a significant premium to DIIG, probably at least twice the price for the same EPS, and some on this thread would suggest even more. One of the reasons DIIG earns so much, is its high margin Multek businesses. But the growth rate for that business over the next five years, isn't as great as the assembly and EMS businesses. (Although this year, the two new acquisitions should 'goose' Multek's growth rate.) So DIIG's PE should be less than FLEX's PE. Enjoy. Paul

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