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

To: kolo55 who wrote (2032)	5/6/1999 2:32:00 PM
From: 18acastra	Read Replies (5) \| Respond to of 2542

you da man. new field of interest is distribution. IM & TECD. feels like these are similar opportunities to ECM sector 2 years ago. misunderstood/undervalued. jmho.

To: kolo55 who wrote (2032)	5/6/1999 7:26:00 PM
From: MGV	Read Replies (1) \| Respond to of 2542

There is no point on which to argue. I found your statement that the market "agrees with [your] views" too pompous to pass up. Aside from being way too self-congratulatory - even if it were accurate - the statement isn't at all accurate with respect to two key names in this sector: FLEX and CLS. On 3/16 CLS was trading at $28 and FLEX at $45.50. You abruptly dismissed another poster's opinion on CLS and stated your "view" - i.e. "relative fair value for CLS to FLEX was 28-30 to 42", respectively. You have been way off the mark and, given your tendency of self-promotion, it bears being noted. The market is now pricing CLS at 37-40 versus FLEX, which closed today at 45. Over that time FLEX is down $0.50 while CLS is up $9 at 36 15/16. On a percentage basis the difference is even more dramatic. CLS is up 33% absolute and a little over 34% relative to FLEX. Moreover, the move is wholly supported by fundamentals. CLS' revenues grew 46% in the latest quarter. Forward guidance is strong. Management is calling for $10 Billion in revenues by 2001. Everything about your view on these two is grossly off the mark. On a forward price to sales basis CLS is still at a significant discount to FLEX even though it is significantly higher than where you pegged fair value relative to FLEX. Your relative valuations just don't measure up and the market certainly has not supported "your views." As I said at the time, I like both CLS and FLEX. I liked CLS a little better on valuation. Your call to short CLS - that is your call - is especially irresponsible in light of the people posting here who seem to indicate close to blind acceptance of what you write. Advocating any kind of short is an extremely risky call that can expose the short to unlimited liability. In this example it is egregious (upon analysis of the fundamentals of the two names.) Between CKFR, VLNC, and this call, let me suggest you get out of the business of self-congratulation and learn a little more humility.

To: kolo55 who wrote (2032)	5/10/1999 1:52:00 PM
From: kolo55	Read Replies (2) \| Respond to of 2542

Time to consider closing FLEX/CLS pair trade at a nice profit. Last Wednesday, I suggested a pair trade, noting that FLEX's stock price was less than 15% higher than CLS. I would expect FLEX stock price to trade 30-50% higher than the CLS stock price. Here is the excerpt suggesting the pair trade: My current comments on relative valuations of FLEX versus CLS: As usual the volatility in this sector leads to some strange short-term relative valuations. FLEX gave up 30% from the highs hit close to the time of my post, and today CLS traded as little as a 5 point premium to FLEX (only about 13%). This is in spite of FLEX's greater earnings per share and the likely higher growth rate for FLEX. I think it would be a good time to short CLS and buy FLEX when the stock price differential is less than 15%. I expect that as FLEX's faster growth prospects become apparent, FLEX will open back up to a 30-50% premium over CLS shares. This is what I was referring to in my post today, when I said: "In fact, if FLEX tries to drop below 40, I consider it a preferable buy to SCI at 38-40, especially so for the long term. I already see FLEX as mis-priced relative to some of its peers." I don't think anyone could construe my March 16 post as recommending purchase of FLEX at over 48-50 per share. I usually post my trades in the EMS sector, unless its some sort of pair trade, or hedging trade. Today, I did buy FLEX at 44, and I did short one of the EMS stocks as a pair trade. Right now CLS is a prime candidate to short versus FLEX. Well with FLEX at 50 1/2 and CLS at 38 1/2, now FLEX has opened up to over a 30% premium over CLS, and now might be the time to consider reversing the pair trade, and covering the CLS short. You make 15% on the pair trade, and if equal dollar amounts of FLEX and CLS were bought and shorted respectively, there was no capital invested, although the trade would use up margin for most of us. But there was zero net margin interest charges. Enjoy. Paul