Paul,
I haven't referred to the market value of Deswell in my posts, preferring to limit my comments to analysis of the company. However, we are all in a similar position now and must make a decision about our Deswell holdings: if the price climbs do we hold or reduce?
I just 'cut' a long analysis of the value of Deswell. Briefly, I want an investment (market or otherwise) to at least double in value in three years. If one makes projections based on a growth rate equal to half of trailing, earnings would be near $4.50. I can easily see Deswell being $54.00 three years from now. In addition, we can anticipate $4.00 of dividends over the period. This produces a current value of Deswell around $30 and a good buy at anything below $28.00. At $28, an investor can conservatively project a compounded return of 40% over the next 3 years and, if past growth continues, much higher.
I see virtually no companies that are likely to produce this growth. The overall market is overpriced and, with the current world situation, likely to fall over the next few months. Deswell won't be immune to the down pressure, but it is so undervalued that selling seems foolish. I might reduce near 30, but, unless something better comes along or there's a major change in China policy, I'm holding all of my shares.
For what it's worth,
Ron
BTW - I looked this morning and we made the top of the 'Biggest Gainers' chart. |
