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

To: kolo55 who wrote (1981)	3/16/1999 9:48:00 AM
From: Marc	Read Replies (1) \| Respond to of 2542

Thanks for you comments, i appreciate, but all the numbers in the table were right, exept that now almost all of them would be 40% more overvalued. FROM THE MERILL LYNCH REPORT DATED 11 February 1999 -We believe Celestica has the opportunity to have one of the fastest earnings growth rates in the industry (30%) over the next five years. -Celestica has rapidly built one of the leading contract manufacturers, through robust internal growth and acquisitions. Most important, Celestica discussed on its conference call that it has been awarded eight contracts from five different telecom equipment customers. Three of these are from new customers. The company's ability to win these projects provides further evidence of the company's excellent service and manufacturing capabilities. Management believes that three of these customers could account for more than 10% of Celestica's sales in the next two years. The telecom equipment OEMs represent the most significant incremental opportunity for the large contract manufacturers over the next 2-3 years and Celestica is already beginning to benefit. These OEMs are increasing the amount of manufacturing that they outsource. All of the major companies in the industry--including Lucent, Nortel, Alcatel, Ericsson, Nokia, and Motorola--are expected to utilize contract manufacturers to a greater extent in the next few years.

To: kolo55 who wrote (1981)	3/25/1999 10:28:00 AM
From: rich evans	Read Replies (1) \| Respond to of 2542

Paul, Have you been following SCI at all?It is taking another hit today and may be a good value in the ECM area at its present price. What do you think? Rich

To: kolo55 who wrote (1981)	11/2/1999 8:43:00 PM
From: MGV	Read Replies (1) \| Respond to of 2542

Pretty poor judgement wouldn't you say? Note returns are + or - 3-5%: CLS return from 3/16 is 120% JBL return from 3/16 is 28% FLEX return from 3/16 is 50% Can anyone figure out what was overlooked? There is plenty to consider - the vast differences in relative return over the period confirm that point. The author recommended shorting CLS and going long FLEX. He was 1/2 right. message from Paul M. Klemencic on Mar 16 1999 "From what I know, and I haven't done an in-depth analysis of Celestica, I'm not excited by their businesses. The IMSX acquisition wasn't a very good business, as reflected in the price, the workstation biz they bought in Colorado isn't a strong growth provider for HP, and the company's HQ and their biggest plant in Toronto doesn't seem to be located in a logical place for an EMS provider. From my limited look, Celestica seems to be good at acquiring a mishmash of businesses the others don't want. By comparison, the HP laserjet business acquired by Jabil was a gem at an incredible price. The purchase of Neutronics in Europe by Flextronics was a real coup. And if rumors of deals with Dell and Lucent pan out for Jabil, and if Lucent is the unamed new telecom customer for FLEX (along with six other new customers), the forward looking growth for these two is terrific. And major new deals have a bigger impact on these two, since they are still about 60% the size of Celestica. I think they can grow faster longer, before the growth trails off, just because their size is so big. Finally, I like the strategies evidenced by the management teams at Solectron, Jabil, and Flextronics. Solectron is one of the best managed companies in the world. Jabil has developed an competancy edge in some very fast growing technologies (note huge biz with Cisco), and Flextronics has set up a global system to be the best (and lowest total cost) producer in the world of portable and consumer electronic devices. They are all managed really well. If I can buy these guys at times at great prices, why mess with the others?"