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

To: jeffbas who wrote (915)	12/3/1997 11:16:00 AM
From: kolo55	Read Replies (1) \| Respond to of 2542

Curious dichotomy- distributors strong and ECM getting hammered. The sell-off today seemed to be started when Solectron had a delayed open and opened down 5 points. Street seems to be anticipating an announcement from Solectron. Given the date, December 3, and the earnings announcement next week, perhaps an earnings warning is coming. I'd be surprised; by what I've heard, Solectron is doing well. I'm looking for reasons why Solectron would see such a large order imbalance. The institutions own about 80% of Solectron stock, so if they all decide to dump, a sharp move like today is possible. Again, the market is looking at Solectron right now as a market bellweather. My timing on my last post certainly was lousy. Paul

To: jeffbas who wrote (915)	12/3/1997 11:40:00 AM
From: Asymmetric	Read Replies (2) \| Respond to of 2542

Jeff, First Off, I Sure Wouldn't Sell The Major ECM stocks at this price. If you haven't sold already, (which in the main I haven't), it's already too late. The position I am putting myself into is one of being able to ride this thing out, since I feel I am behind the curve on executing my strategy --- that of bailing out! (just kidding). Secondary, to have enough of a cushion to catch any tremendous values which may present themselves in the near future. I don't have a handle on the fundamentals which drive the distributors like Avnet and Arrow so am no help there. But just remember, just because they haven't fallen yet, doesn't mean they won't fall tomorrow or next week. Just as various sectors in the tech area won't rise all at the same time, they won't all necessarily fall at the same time either. Sometimes it just takes awhile for the short sellers to notice and go after them. <gg> Note also, that I'm not saying they will, just that perhaps there is some time lag involved in where they will go next. My touchstone is somewhat different from yours. I use ECM stocks as a proxy for both the tech sector, and for the economy. We all know the ties between ECM's and technology so I won't repeat past posts. The cross reference I use is commodities. Falling commodity prices in beef, oil, steel, copper, aluminum, paper, etc speak volumes about the future prospects of the world economy. It is the breadth of the fall across a broad range of commodities that concerns me here. Good luck. Peter.

To: jeffbas who wrote (915)	12/11/1997 7:35:00 PM
From: kolo55	Read Replies (1) \| Respond to of 2542

Interesting to look at the distributors. Earlier you mentioned Avnet and Arrow, who distribute electronic goods. Take a look at Kent(KNT) today; they distribute parts and supplies to the electronic industry and also have a relatively small ECM business. Kent dropped over 6 points to the 23 range. I keep an eye on these 'ECM related stocks'. I don't know what caused the drop today, but before the market opened, this was announced: Thursday November 13, 8:12 am Eastern Time Company Press Release Larry Olson Named President of KTEC Electronics HOUSTON--(BUSINESS WIRE)--November 13, 1997--Kent Electronics Corporation (NYSE:KNT - news) announced today that Larry Olson, current President of Kent Components, has also been named President of KTEC Electronics, the Company's contract manufacturing operation. Richard Hightower, currently a Kent Components Regional Manager, has been promoted to Vice President and General Manager of Kent Components, the distribution operation of Kent Electronics. Mr. Hightower will report directly to Mr. Olson. The Company stated that this will allow it to better focus its efforts on specific customer market opportunities. Morrie K. Abramson, Chairman and Chief Executive Officer of Kent, stated, ''As a customer focused company, we believe this action will better serve our growing OEM customer base.'' Mr. Randy Corporron, President of KTEC Electronics, will resign from Kent to pursue other opportunities. Morrie Abramson expressed his appreciation to Randy for his instrumental role in the growth and development of KTEC to date. Kent Electronics is among the largest publicly traded specialty electronics distributors. Kent's contract manufacturing subsidiary, KTEC Electronics, is among the leading contract manufacturers in the U.S. After this release, the stock plunged. This in turn caused the compnay to release this after the market closed: Thursday December 11, 6:28 pm Eastern Time Company Press Release Kent Electronics Comments On Expected Results HOUSTON, Texas--(BUSINESS WIRE)--December 11, 1997--Kent Electronics Corporation (NYSE:KNT - news) said today that it expects revenues for the third quarter ending December 27, 1997, to be in the range of $170 - $180 million and earnings per share for that period to be approximately $0.36, which is in line with analysts expectations. The Company went on to say that it expects fourth quarter revenues to be in the range of $180 - $190 million, a significant increase over last year's fourth quarter revenues, but only modestly above the prior quarter. Earnings for the fourth quarter are expected to be similar to those of the fiscal 1998 third quarter. This is a result of lower than anticipated contract manufacturing revenues, reflecting a slower ramp-up of new customers and of new customer orders. Morrie K. Abramson, Chairman and Chief Executive Officer of Kent Electronics, said ''We have refocused our sales and marketing efforts under the leadership of Larry Olson, the newly-appointed President of KTEC and we look forward to seeing the full benefits of these efforts in fiscal 1999.'' My guess is the stock sold off, just in anticipation of more bad news coming following the "firing" of the CEO of K*TEC. People are getting awful jittery out there. I smell fear and 'blood in the streets'. Next week should be very interesting. Paul