"Rabid Rat" bounce for JBL in the morning or a few days, followed by testing of lows of today.
Top of today will be the first resistance point. low before the crash (25) will be next one. 27 next and Big resistance at 40.
IMVHO JBL is a good short candidate just below every resistance points.
First being 22-.
However a prudent approach is to wait and see JBL action Tommorow. And decide accoordingly.
JBL down 7 FLEX down 5. FLEX is sure more undervalued than JBL now.
A good sector startegy will be to short JBL and long FLEX for next 6 months or so. Next Q listening to CC i dont think anything real positive will happen on JBL front. So no risk on JBL short for six month time frame.
FLEX should be closer to SLR.
I bought FLEX today at 23. With stop loss at 21 1/2.
After the FLEX results if FLEX performs. If I do not get stopped out on FLEX.
After FLEX results if FLEX ok I will have long FLEX short JBL position.
Missing earnings is a NO-NO not for nothing good management pre-announce. Worse is letting a few know and kill the rest.
In 98 Mar when they just said revenue booking delayed. They were killed from 40 before earnings (which was down from 97 price of 72) to a price of 30 for whole of the year. Underprorming Nasdaq for whole year.
Starting from 40 in Mar 98 JBL went to 23 in Sept and the only reason they recovered to 70 by end of year was because they proved what they said about revenues was correct. No real harm was done to eranings.
Situation is much worse now. Real harm done to earnings and management credibility.
Damages like these take a long time to recover and Rightly so.
If you want a low PE stock in ECM ACTM is a good candidate. If you want a good stock SLR is one.
The worst mistake we can do at this point is to get fooled into beleiving our False dream of ECMs are immune and JBL management is great.
Both of these assumptions have been proved wrong conclusively by JBL's result.
Till the point there is proof positive that JBL has recovered earnings future, there is no future for JBL stock.
The best case scneario is Mar result they dont screw up more, June they perform the super guidance, (which is based on new prod rampups etc.), Sept they repeat great performance.
Only after that Street may give them some of the credibility back.
And after the Dec quarter, with all the big pile of good earnings assuptions, they may come close to PEG of 1.
Which assuming a growth of 40% YOY for 2002 will be around 1.40*40 = 56$.
However The memories of missing numbers, will be there for a long time. JBL deserves to and IMHO will trade at a good discount from the good companies of the sector like SLR and if good result FLEX.
The best case 50-60$ by End of Dec or earnly next year.
While if that happens the whole tech sector would be flying big time. Giving SLR probably a price of 90-100$ and CSCO 80+.
The best case JBL will probably give the same return as SLR and CSCO of the world from this point. In average case JBL will keep on underperforming market for a few quarters atleast.
Surely a time to sell all of JBL or if not that most of it and go for other players.
I did not learn how to short cause i kept on beleving in false reaffirmations of earnings by JBL while they were telling there preferred stock holders go ahead sell and short.
Now I will learn to short cause of JBL. I will be watching closely for every shrting opportunity In JBL near future.
If you want to invest in ECM future invest in SLR maybe FLEX, SANM, CLS. Why would you want to buy a company that has proved to be the weak one in challanging time compared to peers and that has slapped you in your face and robbed you by selective leaking of news.