Sanmina On the Line with the SEC?
Published: 26 May 2006
by Staff
At a time when more and more technology companies are coming under investigation by the Securities and Exchange Commission for irregular stock options granting practices, Miscioscia said Sanmina's story is the "most interesting" out of all the EMS companies he covers.
Backdating involves manipulating the stock options' issue date so that the options become more valuable for the holder.
From October 1998 to October 2002, Miscioscia calculated that the stock options grant price was at the spot-on-low during the 90-day December quarter, and in 2000, it was one day away from the spot-on low. And for four of the six options grant dates, he said Sanmina saw some of the best results for those days in the 20 days after awarding grants.
"The odds of this happening were about 1%; the 1% probability was hit four times out of six during a five-year period," Miscioscia wrote in a note to investors Thursday.
"While we have no evidence that Sanmina backdated, and we are not suggesting they did, our findings are similar to other companies which have had issues."
Miscioscia maintained a "neutral" rating on shares of PCB maker. As for the other providers in the EMS sector, the analyst found that Celestica and Solectron were probably in the clear.
Flextronics, meanwhile, showed some good timing in the awarding of its stock options grants, but there wasn't a specific, consistent pattern, Miscioscia found.
