Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.400

-0.3%

Nov 6 3:58 PM EST

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To: j rector who wrote (1034)	10/12/1998 1:11:00 PM
From: Ron Bower	Read Replies (1) of 1418

j, Paul, & all, I am also one that respects Paul Senior's opinion. However, from his post it is obvious that he hasn't made much research effort nor, since he doesn't own, has he been following the company. I do feel that his cautionary remarks should be considered. His Indonesia example is way off the mark and cannot be applied to Deswell at all. There aren't many acquisitions that Deswell could make that would be affordable with existing cash and borrowings might be necessary. If they were to acquire, I would expect it to be a majority interest similar to NamTai's acquisition of Albatronics wherein Deswell's cash flow would be needed for working capital. (I don't like NamTai's purchase of Albatronics because the debt load is too large and it offers little in the way of diversification for NamTai. I feel they've bought a lot of problems rather than made a good investment.) I have tried to think of a good acquisition they could make. I see no advantage in buying into a plastics company with debt. Nor do I see a reason to buy into another company like Kwanasia (although a company making cell phones might be interesting). I think I prefer that they continue past policy of acquiring customers and expanding to meet demand. It appears they may be having success in this effort. My only point in my prior post is that the amount of monies may seem high, but it wouldn't if sales were to show a dramatic increase. They had something in mind as they could have issued a larger 'Special Dividend'. I agree with you. HK/China is desparately seeking foreign investment and would likely impose severe penalties on any individuals that defrauded US investors. This may make Deswell an even safer investment than many US companies. JMHO, Ron

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