Did you check and calculate the share counts yourself ?
You wrote:Thanks for you comments, i appreciate, but all the numbers in the table were right, exept that now almost all of them would be 40% more overvalued.
When you calculated market caps for the stocks, did you look at the recent SEC filings for the company, and adjust latest Q reported shares outstanding for the recent secondaries and outstanding options that were out of the money at the last report, but are now in the money due to the big run-up in stock prices?
The marktet caps and outstanding shares reported by financial reporting services like Yahoo, S&P, StockSmart, etc. are often wrong in this sector, due to acquisitions and secondaries etc. I hope this isn't where you got the info you presented in the table.
We've discussed this several times on the thread, and have often found errors of 20-50% in the market caps or outstanding shares. I would never trust these services to report this info accurately, especially in this sector where we have found big errors time and again. This is especially true if the info prepared in the table you presented was some of the key parameters you look at when you make an investment decision.
(In fact, when I do an in-depth analysis prior to a purchase, I try to estimate the number of outstanding shares when the stock hits my price target. Sometimes there are significant numbers of incentive options that were out of the money at the last report, and therefore not included in the outstanding share count and fully diluted earnings calculations. When the stock rallies, suddenly these shares emerge from the woodwork and show up.)
Regarding the "40% more overvalued" comment, I think the pop in FLEX Friday and yesterday was due to favorable comments and publicity in Investor's Business Daily and The Street.com, and these are not the kind of shareholders I welcome. Rallies after mentions in these rags tend to be short-lived, and often reverses. But I'm pleased to see that FLEX has almost caught up to SLR share price, as I predicted.
But I still maintain that FLEX should trade at a 30-50% premium to CLS shares. I would agree at this point that CLS possibly has some catching up to do. If FLEX backs off to 42, and CLS rallies to 28-30, that would put them at fair relative valuations (40-50% premium). On the other hand, big institutions seem to like to buy the best performing companies, not the cheapest, these days. And the best companies in the sector are SLR, JBL, SANM, and FLEX. Their premiums to the sector could just keep growing.
From the analyst report you cited:
-We believe Celestica has the opportunity to have one of the fastest earnings growth rates in the industry (30%) over the next five years.
This is precisely the problem. They will grow 30%, and FLEX and JBL will grow over 40%.
Paul |
