David & Richard,
I am a devotee of Richard's response, looking for the small, thinly traded stocks that are undervalued. I don't buy with thoughts of selling, I buy with plans to keep. I have owned some of the stocks Richard mentioned and others similar. When I bought, they were priced well under value then move up. I sold if I found a company selling at better value. This has worked well as I recently reviewed the stocks I've held and find that all of them are selling above my original buy-in price.
Is Deswell a good 'investment'? Over the last 4Q earnings growth has been over 50%. FFO growth has been even higher and I consider this to be the true measure of a company. I feel they have a conservative annual growth potential exceeding 25% over the next five years. Shareholders will at least triple their money taking dividends and price into consideration. I don't see this potential with other companies, particularly the high liquidity companies preferred by the funds and other investors.
WalMart, Microsoft, Intel, IBM, etc. were all startup companies at one point. Deswell won't be one of these, but it will be far larger than it is now.
I am starting to like this situation. If DSWLF or JWC were trading near value, I'd be looking for better buys. A vacation from the market.
Just my thoughts,
Ron |
