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

To: 18acastra who wrote (950)	12/11/1997 4:59:00 PM
From: 18acastra	Read Replies (2) \| Respond to of 2542

Anybody with thoughts on HADCO (HDCO)? These guys have really been beat up lately, but great comapny/great competitive position. PCB industry is huge ~$10bb, and very fragmented. Hadco is the dominant/scale player in the industry and has been consitently able to take share from smaller players with less capability, supporting a consistent EPS growth rate of 20%+ Stock is currently trading about 12x 10/98 earnings. Seems dirt cheap for a company that has consistently grown earnings at 20%-25%. Anybody with any thoughts?

To: 18acastra who wrote (950)	12/12/1997 12:02:00 AM
From: Paul Senior	Respond to of 2542

18acastra: And just how long do you suppose it's going to be for customers of FLEXF and other ECMs which are profiting from Asian devaluation to approach FLEXF and others and demand price consideration -- share that benefit?? After all, any good industrial customer knows or can find out pretty well, what it costs their suppliers to mfg. the component. Any purchasing manager worth her/his salt will be jumping to renego. the contracts they have or additional business they might offer. All it takes is one public agreement between one customer and one supplier, and all customers will be demanding the same price reduction. Any business which relies on cheap labor to sustain outsize profits is a dangerous business in which to invest. My opinion. (and I have this week added to my long FLEXF position)