Richard,
Glad to see you are still on board.
In this market, Deswell looks very good.
Factors I'm watching-
Strength of the yen - IMO below 120 gives Deswell a big advantage.
Namtai should report earlier than Deswell. Strong earnings from them would (IMO) be an indicator for Deswell
Two things I'll be watching for in the Q report-
Earnings near last year's Sep Q would be very positive. I doubt if they can make last year's numbers this Q, but am looking for big improvement in the Dec Q. If they reach last year's numbers, $2.00 for the year is not only possible but likely.
They mentioned a "major new customer" in the last report. I hope to see a new name on the customer list.
If I figured right, Jetcrown can reach $12M revs on former capacity. The machinery they added this past year would substantially increase potential. It looks like Kwanasia and Kwanta will continue to be weak, but I doubt if they will be a drag on earnings. If Deswell reports around $15M revs and earnings near $3M this Q, look for big time gains in the Dec Q with Jetcrown's new equipment in production.
If the situation is as I think it is, we'll probably see another 10% dividend increase this year.
A good time to buy? The companies net worth (not BV) is more than the current price, they'll generate over $2.00/share operating cash, the dividend is likely to be near $1.00, and all indicators are for growth going forward.
But then, this is a very biased opinion.
Ron
My usual brief response -g- |
