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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (2274)	3/8/2000 11:11:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 2542

JBL flipped for SLR?.......Solectron Corp. (SLR: news, msgs) told investors the company will report second-quarter earnings on March 13, after the market closes. The consensus estimate on Wall Street is a profit of 38 cents a share, according to First Call. The company earned 36 cents a share in the first quarter of fiscal 2000 and 26 cents in the year-ago second quarter. Deutsche Banc Alex. Brown's analyst Michael Carboy voiced some concern about the the electronics manufacturing services company in morning research notes Wednesday. Carboy said he maintains a second-quarter estimate of 38 cents a share but warned that his revenue estimate of $3.02 billion might be too bullish. Carboy said a team of analysts from Deutsche Banc paid a brief visit on SLR Penang Malaysia operations and came away with a clear sense of a healthy business for serving the PC and PC server markets that was straining recent capacity expansions. However, he said one site is not a clear picture of how the contract manufacturer will operate with 39 sites. "We believe SLR management must better explain growth ambitions and sources of growth in the second half of fiscal 2000," noted Carboy. Solectron is shooting for $14 billion in revenue for all of fiscal 2000. Shares closed down 2 7/16 to 63 15/16.

To: kolo55 who wrote (2274)	3/9/2000 10:18:00 AM
From: MGV	Respond to of 2542

Bob, I will write down my thoughts on CLS in the next day or two; in general, prospects are good there - it did become very expensive relative to the other top tiers when it reached the mid/high 50s a few weeks ago. It is basing nicely here as business fundamentals catch up to valuation. They have some of the best customers in tech and Polistek has executed very well. I have to comment on the statement Paul Klemencic made regarding relative valuation of FLEX to CLS. He states that he called for FLEX to price at a 30-50% premium to CLS "and today that is where it is." Well who knows where or how he makes such a statement but the statement is just plain wrong. See below. On a forward price to sales basis FLEX (0.9)is now at a discount to CLS (1.2). It is not priced at a premium to CLS. To repeat, FLEX is at roughly a 25% discount to CLS, not the reverse. For that reason I have been increasing a position in DIIG this year and have net sales of CLS even though I have not sold a core position. The calculation is based on a FY2001 rev. forecast of 8.4B for FLEX (FY begins 4/1/2000) and FY2000 (FY is CY, began 1/1/2000) forecast of approx. $7B for CLS.