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

To: kolo55 who wrote (1679)	8/17/1998 11:25:00 AM
From: 18acastra	Read Replies (1) \| Respond to of 2542

Would agree except for Solectron. My confusion concerning Solectron on a relative basis to other ECM stocks remains remains high, especially vs. Flextronics. Solectron is virtually at a 52 week high, and this is after revising earnings estimates down 6 months ago. Its multiple therefore has actually expanded significantly in these turbulent times. Flextronics at $35 vs. Solectron at $50 is especially strange given Flexf earned last Q on a cash EPS basis what Solectron will do in its 3rd Q of FY 99 according to analysts estimates. I just don't get it. Solectron insiders continue to sell shares like crazy, including recently the CFO. Solectron would also seem to have some of same issues as SCI. My opinion.

To: kolo55 who wrote (1679)	8/17/1998 11:56:00 AM
From: jeffbas	Read Replies (1) \| Respond to of 2542

Paul, I believe the weakness is due to a number of reasons: -General market weakness and specific tech stock weakness. The key characteristic of a bear market is that fundamentals don't much matter. -Serious doubts that the sector will really show 25% growth (even if you limit it to the larger better-positioned players). The semiconductor business is in the pits not because units are not growing but because ASP's are dropping. I suspect that there are concerns of that here. -There has been a lot of plant expansion here. Look at ACTM, for example. They were willing to price business at breakeven to get sales up this past quarter. It doesn't take a lot of players like that to have an impact. -Major fundamental weakness in the Hadco area of the business. -The possibility of a domestic or worldwide recession or recessionary conditions, beyond just Asia. I would love to see some comment to the effect that I am all wet; but I do not think that I am.