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Technology Stocks : Deswell Industries (DSWL)
DSWL 3.630-0.8%Nov 28 9:30 AM EST
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To: kolo55 who wrote (466)2/20/1998 1:28:00 PM
From: Ron Bower  Read Replies (1) of 1418
 
Paul,

I was bothered by the big increase in margin and have been looking for any suspicious numbers. The only thing I've found is lower S&A and it made me wonder what was going on. Then I remembered the outsourced R&D that they have moved inhouse that had been included in past reports.

There's been some option shares issued, not all the warrants were exercised, and the new Full Dilution is 5.480M versus the 5.412M of last Q. They are doing such a great job I sure wouldn't begrudge them some option bonuses.

So we now have a last 4Q of $2.20 FULLY DILUTED and very likely will reach the $2.50 you stated as the 4Q last year as only 2.2M earnings. They need only reach 3.8M for the $2.50 EPS, then look out the next Q when Jetcrown gets the new machines in operation. This will not only boost Jetcrown, but I'm sure Kwanasia is needing the additional plastic supply and Kwanta can also boost. I believe they would be higher than the $19M, but they are running at full capacity.

I don't know who was selling all of the shares at 17 but I bet they wish they had held. I think now we are running into limit orders for profit taking. IMO -That will be the big resistance. Hard to say what will happen Monday. Friday is normally a selloff day. This report ought to draw a lot of attention with all the weak reports coming out.

I should be excited, but it really doesn't come as a surprise. I almost made a post about 'expect a big upside surprise'.

THANK YOU for breaking me in on Deswell. I never thought I would focus on one company, but I don't see any better.

Ron

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