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You know that the U.S. stock market has been rather shaky lately. And you know that there are great bargains abroad, especially since many economies are growing more briskly than our own are. So what should you do? Well, perhaps consider adding an international stock or two to your portfolio.

Here's one to consider: Flextronics International (Nasdaq: FLEX). Based in Singapore, this contract manufacturer makes components for other companies' electronics products. Companies that have contracted with Flextronics include Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ). Some of its competitors are Jabil Circuit (NYSE: JBL), Sanmina-SCI (Nasdaq: SANM), and circuit-board manufacturer TTM Technologies (Nasdaq: TTMI).

But Flextronics doesn't just make items for others. It also offers design, assembly, testing, materials procurement, inventory management, and transport logistics services, among many other things.

Quick stats
Here's a snapshot of some of the top contract manufacturers for 2007, along with their most recent trailing-12-month revenues, as listed by Electronics Design, Strategy, News.



Hon Hai Precision** (Taiwan)

$46.1 billion

Flextronics (Singapore)

$24.4 billion

Quanta Computer** (Taiwan)

$18.6 billion

Sanmina-SCI (San Jose, CA)

$10.1 billion

Jabil (St. Petersburg, FL)

$12.4 billion

*Source: Capital IQ, a division of Standard & Poor's.
**12-month data as of June 30, 2007.

Flextronics is clearly a major player. Having recently gobbled up competitor Solectron, it has grown even bigger. With that acquisition, it should now be able to spread its costs over a wider area, and it will also be capable of making more products and serving more customers.

What's to like?
The looming recession could be good for Flextronics. When times get tough for companies, they sometimes trim their workforce and begin outsourcing various functions. That's where contract manufacturers stand to pick up extra business. Flextronics is built to relieve manufacturers of many responsibilities -- and make money in the process.

On the downside ...
Not everything is rosy at the company. Although the forward price-to-earnings ratio is rather low and attractive at 9.9, the return on equity of around 7% to 8% and the return on assets of around 2% to 4% aren't that thrilling. Gross profit margins of around 7% and net profit margins near 2% aren't generous, either, but high volume can make up for them.

Fools say ...
At our Motley Fool CAPS service, where more than 270 people have rated the stock, some 96% view Flextronics favorably, including 97% of our "All-Star" stock-performance predictors.

One CAPS player, NeroSagetrade, notes that the company "is now trading well below book valuation and is growing revenues at over 30% this year and nearly 20% next year. Earnings are showing solid growth, as well, with [expenses under control]."

MPOWERD makes a simple but critical point: "FLEX has a lot of growth potential. As long as consumers desire the latest and greatest technology, OEM [original equipment manufacturer] parts companies like FLEX will deliver strong earnings." In other words, if people are going to keep buying complex electronics products in greater numbers, there will always be a need for contract manufacturers -- and Flextronics is a major player in that field.

The consensus is that the company is undervalued. If Flextronics can meet the analysts' growth estimates of 20%, it could be very profitable for Foolish investors. Give us your opinion by heading to CAPS to cast your own vote.

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Longtime Fool contributor Selena Maranjian owns shares of no company mentioned in this article. Dell is a Motley Fool Inside Value recommendation. Dell and TTM Technologies are Motley Fool Stock Advisor recommendations. The Motley Fool is Fools writing for Fools.