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Technology Stocks : Sanmina Corp. (SANM)
SANM 160.31+3.8%Nov 14 3:59 PM EST
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To: leslie wray mackenzie who wrote (79)1/15/1999 10:26:00 PM
From: rich evans  Read Replies (1) of 239
 
Unbelievable in my opinion. SANMs customers must be outsourcing more then expected and ASCEND was an Altron customer so now SANM has Lucent as a customer but still at next years earnings of 2.00 this stock is getting up there. I think earning may be revised upwards during the year to more like 2.15 but we must be looking at more than 30% growth and more accretiveness from ALTRON then orginally forecast. With shares outstanding approaching 60 mill and present run rate with ALTRON of about 925 million the PSR is also quite high for this sector. Compare SANM to HDCO. SANM is about 80 % VAM now and 20% PCB. HDCO is about 20%VAM and 80% PCB. HDCO has only 13.5 mill shares and Sales about equal to SANM presently with the CCIR acquisition. SANM has acquired using pooling and its stock. HDCO has acquired using debt although it did due a secondary to repay the debt from the Zycon deal but it still has 350 mill in debt versus I think 10 for SANM. So next year HDCO could do 1.50 -1.75 and 2.75 in 2000. HDCO sells for 32. What a difference in valuation. Is it justified? Does the performance of SANM (10% net) versus HDCO which used to be 6% net create this price difference or are we looking at a huge difference in growth because of SANM backplane/ mix leadership in telecom versus HDCO PCB/ mix leadership. Anyway I am confused with these price differentials. What do you all think?

Rich
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