Jabil Circuit Inc is one of the leading global suppliers of electronic manufacturing services (EMS) and solutions for several industries including networking, computer peripherals, and telecom. The company specializes in printed circuit boards, electronic components, and systems. EMS companies like JBL are able to reduce unit costs for electronics manufacturers by combining similar manufacturing operations into a smaller number of plants, creating operational synergies with lower unit costs. We like Jabil Circuit Inc for the following reasons:

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In 1963, business for American Express was booming: half a billion dollars of traveler’s checks were in circulation and over one million people had American Express cards. Then, scandal hit. An Amex warehouse subsidiary had issued receipts to Allied Crude Vegetable Oil Refining for bogus tanks of salad oil. The receipts were used to obtain loans on which Allied subsequently defaulted. When the creditors came to seize their collateral, the bogus tanks were exposed. While perhaps not legally bound, American Express assumed moral responsibility and was on the hook for $150 million – more cash than the company had on hand. Following the incident, American Express stock fell from $60/share to $35. As Amex’s share price fell, a little-known (at the time) investment manager named Warren Buffet purchased approximately 5% of the company. After determining that the scandal had no negative impact on cardholders’ propensity to use their Amex charge cards, Buffet concluded that the “salad oil scandal” was a one-time event from which the company could easily recover. His conviction was strong – at one point American Express accounted for more than 40% of his portfolio.

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AFG’s superior recommendations were recently recognized by www.LikeAssets.com, a website that prides itself in more accurate benchmarking and tracking the picks of top investment publications as a top performing investment website. Of all investment sites tracked by www.LikeAssets.com that have at least 100 portfolios on record, ValueExpectations.com is rated as the top performer of 2009-2010, with an average outperformance of “LikeAssets.com” benchmarks by 15% over 105 portfolios. Summary of Performance of ValueExpectations.com Picks: • Nearly 3 times as many picks achieved positive returns than picks that achieved negative returns. • 330 of the 453 VE picks from 2009-2010 achieved positive returns. • When compared against LikeAssets.com benchmarks all VE’s 453 picks averaged +15% outperformance. • Outliers? Even if you remove VE’s top 10 picks the LikeAssets.com score still shows +6% outperformance.

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