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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (685)	3/6/1999 1:03:00 AM
From: chaz	Read Replies (1) \| Respond to of 54805

Yes, those were great responses...and appreciated. Uncle F has been peeking at contract manufacturing and I have as well, and nominated myself to do the heavy lifting in that area. But I'm not working up much of a sweat because I can't find a Gorilla here. It's not the low net margins either. These companies simply do not have any compelling technical, marketing, or pricing muscle that any one of their peers couldn't buy, either by raising capital by issuing shares or borrowing, or whatever. Still, SLR, the biggie in terms of cap and revenue is the only one with a two year chart that has a Gorilla shape...up from a split adjusted 7 to almost 43 today. Jbl, less than half the market cap and twice the PS ratio, has found it's way from 8 to 35 twice in the past two years, with some 12 months of very un-Gorilla like declines in between. This has been a pretty good week for the G&K but without a 10% boost today, JBL would have been off 2 for the week, and SLR was off for the week by 1.5 inspite of a nearly 2 point gain today. Both companies show margins declining for the past two years, to 4.2 for JBL and 3.8 for SLR. I suspect that, as they try to do more and more for their clients, they start bumping into themselves on the shop floor, and they can't make it up on the volume. My conclcusion: Definitely no Gorillas here, no Kings either, and IMO, not a chance in the W&W deck either. At $4.5 bil, SLR is King of it's Hill, but, that's all I'll give it.