Thread,
IMO - The drop yesterday has little to do with Deswell's operations, the Asian crisis, or anything else except someone placed a market sell one hour before the market closed. It is a market action, not a company reaction and not a cause for panic - though some will.
We have researched this company extensively. Mike and I have each talked with Mr. Lau. James has worked with them and given us much more insight on the company, the management, and conditions. Can anyone know more about an investment than we know about Deswell?
They are selling at a huge discount to the sector. Why? Namtai sold off a large block of shares, the Asian crisis, some Insider selling. All of this has made for large volatility in the stock of a very conservative and stable company. It scares off investors. If I didn't know so much about the company, I'd would have serious doubts.
We have a company with great management, growth, liquidity, sector, PE, EPS, PEG, PSR, dividends, etc. etc. In today's market it's a $40 company selling for $20. Zack only shows one analyst with a 'buy' rating. I've been looking around and have found there's at least five brokerages rating it as a 'strong buy'.
In 45-60 days we'll have the next earnings report. It won't be anything like the last Q, but I expect excellent growth over a year ago. I also expect a very nice dividend announcement. We also know that they have good order visibility for 1998.
I don't know what's going to happen Monday. I know what I'm going to do if there's more cheap shares available.
For what it's worth,
Ron
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