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Technology Stocks : ADFLEX SOLUTIONS ( AFLX ) -- Ignore unavailable to you. Want to Upgrade?

To: Kent Sarikaya who wrote (217)	1/8/1998 9:00:00 PM
From: Duncan	Read Replies (1) \| Respond to of 718

What happened to all the Adflex followers? Adflex got spanked today. Seagate pre-announced lower than expected earnings yesterday...and with Seagate being Adflex's largest customer in 1997--(35% of revenue)...Painne Weber decided to lower their 1998 EPS estimates from $1.66 to $1.55...but kept approx. $1 EPS for 1997...which will be announced on January 17th...I believe? Painne Weber also kept their buy rating on the stock and said the company has no asian exposure. Mean estimate for AFLX in 1998 was $1.58...but will probably drop to $1.55 or so with Painne Weber's reduction. Note that Painne Weber was the highest EPS estimate for 1998...with the other analysts already estimating in the $1.50+ range. On a positive note, IBM became Adflex's largest customer in the 4Q of 1997 when Seagate's revenue dropped to 15% of AFLX's total revenues. The analyst at BofA Robertson Stephens estimates that IBM will be Adflex's biggest customer in 1998 with Seagate dropping to second place with approx. 17% of total revenues. Also according to the analyst at Robertson Stephens, they had been expecting Painne Weber to lower their high estimate...as did other firms. Robertson lowered their 1998 estimates to $1.50 back on December 15th. Robertson knew back in December, as did others, that the Seagate business would drop in 1998...but Painne Weber was apparently waiting for the Seagate announcment yesterday before they lowered estimates. Once Painne lowered their EPS estimate, it appears as if Painne dumped 120K shares in the last half hour of trading today...which is why the stock dropped so quickly. On another positive note, the analyst communty still expects 1998 revenues to increase by 35%...irrespective of Seagate's weakness. EPS is also projected to grow between 55% and 68%. That's the news. Duncan

To: Kent Sarikaya who wrote (217)	1/8/1998 9:07:00 PM
From: Duncan	Read Replies (1) \| Respond to of 718

I recently read an article on Adflex Solutions in Individual Investor magazine's Magic 25 list. I must say that AFLX was the only company/stock that really caught my eye. After digging a little deeper, I thought I would post a few thoughts to the board...to summarize why I like the stock/company...and to potentially help others lurking the board gain a better perspective for this investment. ---U.S. Company. $15 3/16 stock. 52 week high/low = $30/$7. ---Estimated Revenues for 1997 >$200 million; Revenues $153 million--1996; $101 million--1995 ---Major analyst following--2 strong buys, 2 buys, 1 hold. (BofA Robertson Stephens, Needham & Co., Nations Bank Montgomery, Hambrecht & Quist, and Painne Weber) ---P/E of 11.4 of 1998 estimates. Electrical component industry trades at 20. ---Another strength with Adflex Solutions is its 76% institutional holding base. Approx. 60 institutions hold shares in AFLX with "net" purchases in the past three months. ---Mean EPS estimate for Y/E 1997 is $0.94 and $1.58 for 1998. 68% growth. ---Many expect the company to beat $1.00 for the year and $1.55 for next year. ---PEG of 0.19. ---Price/Sales ratio of 1.05---very undervalued compared to industry. ---Price/Book--2.96 versus 6.28 for industry. ---Price/Tangible Book--3.13 versus 6.63 for industry. ---Current ratio near 2.0 ---Company has beaten Wall Street estimates in each of the last four quarters by $0.02 to $0.04...with the stock jumping $3-4 on each occassion. ---They are the leader in flexible circuit board manufacturing. ---They have substantially diversified away from Disk Drive suppliers as main customers. ---Industry growing at 34% per annum. ---Positively affected by Asian flu---devalued Thailand's Baht...which has led to decreased manufacturing costs and greater profit margins. ---Backlog of over one quarter. ---Both revenues and gross margins are increasing. ---Solid trading volume of nearly 200,000 shares/day. ---In the past 14 months, EVERY major operational or executional issue was delivered to the street better than expected AND ahead of schedule. ---Most analysts target $30-35 in 1998. ---BofA Robertson Stephens is underwriting a 2.7 million share secondary offering...which was postponed in the fourth quarter due to the drop in high tech stocks, including AFLX...and has been rescheduled for after year end earnings release...if the stock price goes back up to $25. This is a very BULLISH sign as the Company and the Investment Bank know the fourth quarter earnings must be very strong...and therefore propel the stock higher before the secondary offering. ---Historically, 85% of each year's stock price increase occurred from January/March through July 31st. It then bases with some volatility through mid-October and then slides through December 31st. ---Customers--Dell, Compaq, Lucent, Motorola, IBM, HP, and other telecom companies. Business Description: ADFlex Solutions is a leading supplier of flexible circuit-based interconnect solutions to the computer, computer peripheral, communication and other industries. Applications for flex-based interconnects include cellular telephones, hard disk drives and other storage systems, high-end consumer products, notebook computers, pagers and personal communications systems.