I am putting together a spreadsheet to compare DSWLF and HIHOF, and in the process developed some projected numbers for DSWLF that I thought I would share for comment. Q4 is usually somewhat weak, because of the Chinese New Year shut down. Looking at past years revenues and margins, I came up with revenues of $18 million, gross profit of $7.6 million, and net profit of $3.6 million or $0.65/share. This would be up 52% from the previous year, and would give a full year EPS of $2.54, which results in a trailing p/e of 8 at the current price of 20 3/8.
For FY1999 (which starts 4/1/98), I increased revenues by 40% (below their recent growth rate) and kept the same margins (which have been fairly steady for several years), resulting in projected earnings of $3.55/share, or 5.7x current price. I believe DSWLF will always tend to trade at a below market p/e (because of their tax situation and foreign location), but think a trailing p/e of 12 would be conservative, resulting in a price target of $42/share in a year.
Dennis |
