Tuesday, September 28, 2010

State of tech report on electronic manufacturing services (EMS)

PRINCETON, USA: Next Inning Technology Research, an online investment newsletter focused on semiconductor and technology stocks, has published quarterly State of Tech Report covering the EMS (Electronic Manufacturing Services) Sector.

Included in this report are updated outlooks for Sanmina-SCI Corp., Benchmark Electronics, Celestica and Flextronics International as well as a preview of what to expect from Jabil's quarterly report that is scheduled for release after the close on September 27.

Editor Paul McWilliams has displayed uncanny accuracy in identifying winners and losers during this challenging and historic period for the markets. After calling the rally that started in March 2009 to the day and providing Next Inning readers with buy recommendations that in some cases returned in excess of 400 percent, he advised readers on May 3, 2010 that the markets were heading for a correction. By the end of the day, the correction started.

In his June 7th Strategy Review, McWilliams advised readers we would see stocks rally in July, but that the rally would be followed by another selloff in August. As we know now, both events materialized as predicted.

On August 30th, Next Inning published McWilliams' Fall Strategy Review that outlines what he expects from the markets during the coming three months and naming five stocks he thinks will hit new highs before the close of the year. Investors are invited to read McWilliams' market insights with no obligation during a 21-day risk-free trial.

Trial subscribers will receive the Next Inning Fall Strategy Review and highly acclaimed State of Tech reports that offer in-depth, sector-by-sector coverage of over 65 leading tech companies and specific guidance on which stocks he thinks investors should own and which should be avoided. These reports, as well as McWilliams' regular commentary and detailed earnings previews, are available for free to trial subscribers.

In addition, subscribers will have access to McWilliams' daily commentary, actionable alerts and his special "Paradigm Paper" that outlines his long-term view for the EMS sector.
McWilliams covers these topics and more in his State of Tech report for the EMS sector:

* On August 31st, when Jabil was trading for only $10.25, McWilliams advised Next Inning readers the price was unrealistically low and it was time to buy. During the four weeks that followed, the price of Jabil has moved up 35 percent. Why does McWilliams think the price of Jabil was unrealistically depressed and what does he expect from the company when it reports results for its August ending quarter? What does he see as a fair valuation for Jabil and how much upside potential does that represent?

* The price of Sanmina is up an astounding 432 percent since McWilliams advised Next Inning readers to buy the stock in March 2009. He reiterated his opinion last December and, since then, Sanmina is the only stock out of the largest EMS sector stocks to post a gain. What led McWilliams to reverse his bearish stance on Sanmina in March and to restate his bullish view last December? What does he see for Sanmina going forward and what does he cite as the major risks that investors should monitor?

* Benchmark is down 14 percent year-to-date. Is this due to the fact Wall Street is factoring too much risk into the equation or are there valid company-specific issues that have caused Wall Street to shy away from the stock? Are there reasons to believe Benchmark will reverse the declines the company has seen from its customers in the medical and computing sectors? Where is Benchmark doing well? Is Wall Street ignoring the value of Benchmark's balance sheet at its own peril? What would be a fair price for Benchmark's stock if its balance sheet was given fair recognition?

* Celestica is up 67 percent since McWilliams suggested that Next Inning readers consider it as a good speculative investment. What caused him to change his tune on Celestica? As opposed to most other companies in the EMS sector, Celestica holds a balance sheet with a positive net cash value. If Wall Street were to take this into consideration and view Celestica as the company it has become under CEO Craig Muhlhauser's leadership, at what price might its stock trade?

* In November 2008 when the price of Flextronics fell to $1.50, McWilliams advised Next Inning readers that Wall Street was applying unrealistic risks to its leveraged balance sheet and noted that it would be no problem for the company to keep pace with its debt obligations. Since then the company has paid off all outstanding debt due through 2010 and the stock has advanced roughly 300 percent. What does McWilliams see ahead for Flextronics and what does he think the company will need to accomplish to push the stock price into double-digits?

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