Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.830

-5.7%

3:55 PM EST

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To: Shane M who wrote (767)	5/29/1998 9:25:00 AM
From: Ron Bower	Read Replies (2) of 1418

Shane, Excellent and well thought out projections. Thanks. Considering current Asian and World turmoil, 25% growth will be very difficult for any company. Deswell has a better chance than most because of it's low overhead and strong financial condition. Current dilution is 5.48M. Likely stock options will add 125-150K per year for an estimated dilution of 5.65 and 5.8M in 1999 and 2000. Does BV take into consideration the dividends they'll pay? This is also a factor to consider in stock pricing as dividend paying companies will become more attractive. The PE of 7.9 is the low. This past year we have had special conditions that has kept the price down. Added to the float the last 12 months has been Namtai selling +/-500K, the warrant call for another +/-575K, and Insider sales of +/-200K. These shares caused a doubling of the trading float and, with the Asian situation, has put a lot of pricing pressures on the stock. This situation should not be repeated in 1999 as all of the dilution is out except for some unexercised stock options. The average PE last year without extraordinary events was 12-13. Going forward, I believe the price range will be at 10-14 PE on trailing earnings. If they show growth over the next couple of Qs, it will be higher because there will be few companies getting any growth and the market will reward those that can achieve it. Again, good work. Thanks. JMHO, Ron

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