FLEX and JBL continue to sell-off.
Flextronics is selling off on the earnings news. I believe some holders were holding looking for a blow-out of the earnings, but the forex losses trimmed earnings about four cents, so they just met earnings estimates. Also Flextronics didn't announce any new telecom outsourcing deals, and there is a lot of rumors and anticipation of these announcements, especially given their strong balance sheet fortified with over $200M in cash. I posted cc comments on the flextronics thread last week.
Jabil is selling off after announcing a secondary offering. They seem to be following in Solectron and Flextronics footsteps raising huge amounts of cash through secondaries and debt offerings. I can't believe this is all a coincidence, and expect these three companies, along with at least Celestica and Sanmina, will announce big deals with the list of big telecom companies who we know are looking to outsource some significant manufacturing. The list includes Lucent, Nortel, Motorola, Nokia , and Ericsson(continuing where they left off last year).
Hard to guess the timing, but perhaps sometime in March/April... a lot of companies like to announce outsourcing early in the year, and then try to complete the deals prior to September (see past deals with Ericsson, HP etc.). This makes it easier on employees.
Off-topic: Now to the real purpose of this post. My wife's most recent purchase (last fall), was MEMC Materials (WFR), the world's second largest producer of bare silicon wafers (and largest market share outside Japan). It fits her pattern of buying deep cyclical growth companies (businesses that are subject to severe cycles, but over the very long term will grow). She sees their wafers all the time at work. Her strategy is to buy these at cyclical lows and hold forever. She hasn't entered this one too well, buying her first shares in the 20s (toe-wetting position). But she then doubled up at 11, and then tripled the combined total at 3 and change. The stock is now at 10-11. There is a thread on the stock on SI, and it has a very weak balance sheet and is majority owned by a German company that currently is putting money into the company through a complicated rights equity offering. Well, you'll just have to do your own research if interested. This one will probably take a long time to work out.
She doesn't want to post on SI, mainly because she considers time expended (along with tax consequences) as very important criteria for judging investment performance. She is proud that she spends only a fraction of the time I spend at this, yet does almost as well. And she's very pragmatic and patient; she doesn't have a problem jumping on one of my stocks ( especially after it has dropped 20-40% from my initial buy point). But she usually dislikes small speculative or small capitalization stocks. This is just her investment philosophy. Buy the best. (She shops at Neiman Marcus (aarg!!!) and on her trips to Italia (twice last year!!), and expects to find and hold the best.)
Well, for what its worth, this is what I have to offer at this time.
Paul |
