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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: Rob L. who wrote (2661)	2/5/1998 4:45:00 PM
From: BenYeung	Respond to of 6317

There is nothing wrong with taking a profit while you have it...but my question is still "What happened to buy and hold?" Anyways, I dont blamed ya because the Dow intraday chart is telling me that we are heading back to the mid to high 7000s. There will be another buying opportunity within two weeks...dont be surprised if the street goes haywire again. I have several covered calls waiting to be closed (when Dow dip back to 7000s)...then I ll let these puppies run.

To: Rob L. who wrote (2661)	2/5/1998 4:50:00 PM
From: Rosemary	Respond to of 6317

Did we see this recent article? February 02, 1998, Issue: 1094 Section: Business & Finance/ Quarterly Financial Review -- Contract Electronics Manufactu CEMs combating a misperception Jim Savage The contracting industry's fourth-quarter financial results, particularly those of top-tier contract electronics manufacturers, were predictably strong. In most cases, results closely mirrored analysts' estimates, which for the six largest public companies in the group showed average year-over-year revenue and earnings-per-share growth of 55% and 102%, respectively. Despite the strong results, CEM stocks remain well below their highs of last fall. Jabil Circuit Inc. and Sanmina Corp., for example, both of which beat the recent quarter's consensus earnings estimates by a small margin and forecast continuing strong growth, have seen their forward multiples shaved by at least 50% since early October. Flying in the face of the conventional wisdom that still considers contract manufacturing to be highly cyclical overflow manufacturing, OEMs appear to be extending and deepening their strategic relationships with their core suppliers. Jabil, Sanmina, and SCI Systems Inc. all exceeded analysts' estimates each quarter in 1996 and 1997. Other industry leaders, including Solectron Corp., Flextronics International, and DII Group Inc., have a level of customer diversity that limits the risk of substantial earnings shortfalls. Beyond the earnings numbers and the growth in core customers are returns on capital ranging from above average to spectacular (return on equity in the top tier ranged from 19% to 39%) and balance sheets capable of financing substantial growth. Some midtier companies have had earnings disappointments, and obviously these smaller companies are rendered more susceptible than their larger peers to customer defections and unwelcome surprises. But despite the lack of negative surprises at the top level and industry leaders' excellent visibility regarding their customers' businesses, investors have largely responded to market uncertainties, particularly those regarding Asia, with knee-jerk reactions. There is no fundamental difference in the P/E multiples of top and midtier CEMs, and the industry as a whole is currently selling at a substantial discount to the market. The CEM industry discount is based on misperception. While investors cite a lack of proprietary technology or OEMs' price sensitivity as risk factors, these are just the factors that ensure continuing growth. Recent CEM financial results - even in the face of Asia, ASP declines, and end-market uncertainty - indicate that the strategic outsourcing phenomenon is alive and well. And a continuing positive outlook bodes well for significant stock price recovery from the recent sell-off. -Jim Savage is an analyst at BT Alex. Brown Inc., New York.