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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (2267)	3/22/2001 4:00:44 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 23153

So YOU were the other buyer at 11! congrats! Were you the other bidder at 11 1/4 as well? Incidentally, thanks for the CDO tip as well. You are outstanding at picking winners.

To: jim_p who wrote (2267)	3/22/2001 8:55:55 PM
From: Think4Yourself	Read Replies (3) \| Respond to of 23153

As you know ACTM has a short position of over 117% of the small float. Herb Greenburg wrote another story today in a pitiful attempt to scare investors again. Sounds like the buying of the last few days has his shorting buddy worried about getting squeezed or having his shorts called in. My question to the guy is what if ACTM DOESN'T disappoint? Sweet dreams fella, assuming you can even sleep tonight. Solectron (SLR:NYSE - news). Flextronics (FLEX:Nasdaq - news). Jabil Circuit (JBL:NYSE - news). ACT Manufacturing (ACTM:Nasdaq - news). The list goes on: Companies that assemble everything from PCs to cell phones. As recently as a month or so ago they were supposed to benefit from an increase in outsourcing by tech firms looking for ways to lower costs. However, with demand slowing, there's not much to outsource! And that has left the contract manufacturers stuck with loads of inventory and earnings projections they don't have a prayer to meet. So, where do these stocks go? Back to my source, the same one who raised red flags here months ago about contract manufacturers, and who thinks companies like these trade at or at some multiple to their tangible book value. (Tangible book is book value minus intangibles, like goodwill.) Solectron's tangible book, for example, is $6 per share. It's a quality company, though, so how much risk does it have at its current price of $19.09? According to our source, maybe the low teens. Ditto for Jabil, the industry class act, which has a tangible book of $6.70 per share. (Our short-selling source would probably cover at $13 or $14. Jabil closed at $18.12 Tuesday.) Flextronics? Tangible book is $4.80 per share vs. the current price of around $19. Will it go that low? Hard to say. "It's not impossible that one of the majors could see some real distress, because margins are skinny and costs are fairly fixed." What does that mean for second-tier players like our friends at Act Manufacturing, which trades at $13.12 and which has a tangible book of around $3.85 per share? For a clue, look at Manufacturers' Services, (MSV:NYSE - news) which came public last summer, quickly blew a quarter, and now trades at $3.31, which is below its tangible book of $5. Both companies are about the same size, and both made money last quarter, but MSV has a stronger balance sheet. "If investors got this bent out of shape over MSV," says our short-selling source, who actually owns a little MSV, "what will they do if Act blows up?" Great question.