Ugh- momentum type traders loading up on FLEX.
This probably means some pretty wild swings and increased volatility. I can't say I welcome the likes of Jeff Vinik.
I've not sold any FLEX this year, since I don't particularly want to pay the taxes, and because, quite frankly the stock is trading only about 20 times the run rate earnings I expect for the DecQ of this year. Considering I expect Flextronics to announce some major deals with large new customers, as well as increased ramps with the seven new customers announced in the last five months, Flextronics should have no problem growing revenues 50+% this year. Since they did $500M in the DecQ, I expect they should be able to do $750M by next DecQ. Thats a $3.0B run rate, and should see market cap at least one times run rate revenue at some point, or about $60-70 a share by the end of the calendar year.
We should hear at least one major new customer program (possibly plant acquisition) in March (possibly not until April). Almost all the major acquisitions and large new customer programs have been announced by ECM players in the months of Feb, March, and April, historically.
I am happy to see the corrections that are occurring in some other high tech areas, particularly semiconductors and semi-equipment stocks. Last several years, the ECM sector has swung with these sectors, and I didn't like to see the likes of AMAT and KLAC trading at 70 recently. It wouldn't surprise me to see FLEX to correct as much as 30% off its high of 46, which means we could see 31-32. But sometime by the end of the year, I expect we will see this stock at 70.
JMO, Paul
Why sell and pay taxes, if that's where we are headed? |
