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

To: axle who wrote (2951)	3/11/1998 2:36:00 AM
From: Toby Zidle	Read Replies (1) \| Respond to of 6317

I own JBIL and don't really follow SLR closely enough to make a reasoned comparison. I checked both through Second Opinion, which rates them very similarly, except that SLR's Relative Strength is rated 'bearish', while JBIL's is rated 'neutral'. It still doesn't give me much feel for SLR. As far as the contract manufacturing industry is concerned, however, both sides you cite have valid arguments. If CPQ, for instance, has too much inventory in the pipeline, they'll order less product and companies like JBIL will suffer until the excesses are sold off. But in a cost-reduction mode, the role of contract manufacturers is very significant and JBIL/SLR etc. will get increasing order levels. These two effects are answers to very different problems. It's hard to say which has more influence at this moment in the short-term. For long-term however, the inventory excesses will be sold off, and the box makers (CPQ et al) will have to get back to ordering. Very good for JBIL long-term, with a questionable short-term outlook. One other factor to consider is that even contract manufacturers need to keep costs under control and broaden their customer base. It seems to me that we ought to be seeing more consolidation in the industry, so look for some degree of buyout speculation to arise in the future (timing of this is uncertain). Just because I see good things for the industry in my crystal ball does not mean I'll hang onto JBIL through thick and thin. I place much emphasis on chart interpretation and if JBIL breaks down severely, I will cut it loose. I have no wish to hold it to $12 so that it might be bought out by someone at $20. Like you, I think the industry is under-priced, but I have to live with it as it is. I'd love to sell JBIL at $50-55 range next time it's there, but I can't allow it much more rope if it tanks on me. And good luck to you too, Axle. toby