Seeing Sparks At A Circuit Maker

Don't be surprised if you haven't heard of HADCO--it's unknown on the Street, too. According to Nelson's Directory of Investment Research, only one analyst follows the company. Yet such names as IBM, General Motors, Siemens, and Intel are HADCO customers. Recently, some investors have been buying shares of HADCO, one of the few major independent makers of sophisticated printed circuits. It trades at around 4.

What's sparking the activity? One Boston money manager believes the economic recovery is certain to ignite investor interest in electronics-related stocks. And HADCO, with annual sales of $160 million, "will be among the quick highfliers once a turn in the electronics business is felt," says the money manager, who has accumulated a 3% stake. HADCO's two-sided, multilayered printed circuits, which connect electronic components, are used in computers, telecommunications, and industrial automation. The computer industry accounts for 60% of sales.

The Boston money manager says earnings are apt to be down in 1991, to 50~ a share from last year's 65~. But he expects profits to rebound to 75~ in 1992 and $1 in 1993. With lots of cash and little debt, HADCO has been buying back stock--more than 500,000 shares since 1990. Officers own some 42%, including 20% owned by Chairman and CEO Horace H. Irvine II.

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