Flex Ltd. (FLEX)

Flex assembles electronics to order for other companies — contract manufacturing at a thin margin.

The customer outsources manufacturing entirely: component purchasing, assembly, testing and logistics. The company earns a small percentage of a large turnover, so profit is set by plant utilisation and planning accuracy rather than by the product price, which the customer determines.

The growth line is data-centre equipment: racks, power and cooling systems, where volumes are large and schedules tight. Automotive and medical lines provide longer contracts. Risks: customer concentration, component inventory and manufacturing geography. Margins here are thin by nature: the company assembles other people's designs, and value comes from scale and supply chain discipline. The company buys back stock and pays no dividend.