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Technology Stocks : Flextronics International (FLEX) -- Ignore unavailable to you. Want to Upgrade?

To: John Morelli who wrote (766)	9/5/1998 12:27:00 AM
From: Paul Senior	Read Replies (2) \| Respond to of 1422

J. Morelli: re "We shareholders need/expect a statement" You speak for all shareholders, do you? If you knew what FLEXF's intrinsic value was, you wouldn't need M. Marks to come out and hold your hand. You'd hold your position or you'd be gone. That's IMO. Regarding a buyback, if FLEXF is so darn cheap, how about you posting that you are buying, rather than promulgating that FLEX buy itself? JMO. Senior

To: John Morelli who wrote (766)	9/5/1998 3:59:00 PM
From: kolo55	Respond to of 1422

Flextronics doesn't have the cashflow for a buyback. In your post, you suggested that Marks should do a share buyback. The cashflow in the last quarter was $22.7M (noted in Marks' most recent letter to shareholders). CapEx this fiscal year will be somewhere in the $80M range last I heard. In FY98 it was $98M, but that included a lot of greenfield facility capital that shouldn't be repeated. But the CapEx may be even higher if Flextronics is getting some good deals. The recently announced Qualcom deal in Brazil will take $35M to fund Flextronics 50% portion of the $70M investment. As of the last quarter, the company still had $50M left from the debt and equity offerings last fall. I suspect this is earmarked for opportunistic expansions. Finally if I remember correctly, Marks said he doesn't want to compete with shareholders in bidding for the stock. So guys, the market will set the pricing on this stock, and right now the market is pounding it. I still think this stock will be an excellent investment over the next several years, and the price now reflects some pretty horrible news, if such news exists. It could be that the market just doesn't like companies with operations in Asia (China and Malaysia), Mexico, Brazil, and Eastern Europe (Hungary). I guess someone could make the argument that compared to the valuations of businesses sold on the depressed stock markets in these countries, and valued Flextronics operations in each country based on these valuations, then the current stock price for FLEXF isn't too far out of line. I haven't done this analysis, but I believe that Flextronics as an integrated international, and now one of the largest players in the EMS industry, should not be valued in this manner. By most historical measures, this stock is extremely undervalued at the current price. Paul