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Technology Stocks : Solectron -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (222)	12/16/1997 7:52:00 PM
From: Philip B. Reitano	Respond to of 493

Paul, If SLR's contracts are that short term, surly they will track price flucuations alot faster that somebody carrying more inventory. If volume increases, it only makes sense that SLR will profit more quickly because it tracks price changes closer than most. Phil

To: kolo55 who wrote (222)	12/17/1997 2:05:00 PM
From: P.T.Burnem	Read Replies (2) \| Respond to of 493

I guess this is what the bears are thinking. But lets be realistic. Most of Solectron's customers don't have manufacturing capacity anymore to pick up the work. So in order for Solectron's orders to dry up, these customer's unit sales will have to drop to zero. If HP, Sun, IBM, Ericsson, Cisco, 3Com, Bay Networks, Toshiba etc etc have their unit sales drop to zero, this country has big problems. This is a pretty extreme case. The orders may conceiveably drop 5-10-15% if a projected '98 economic slowdown materializes (or due to a high US$). That in turn would hurt the bottom line. Any decline in rates of growth, profit margins, etc. would be greatly magnified in the stock price. SLR's fortunes are closely tied to the business cycle. However, the current economic cycle has been around for so long that many investors have come to regard SLR as a growth stock and not a cyclical that it really is. PTB