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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (245)	11/17/1997 3:40:00 PM
From: kolo55	Read Replies (1) \| Respond to of 1418

I don't get it either. Stock lanquishes as sector rebounds. Almost no volume today; literally no buyers. Given the good earnings report, I think the stock is very cheap here, both on a relative basis and on an absolute basis. I wonder if the market expects a poor Dec Q report on a sequential basis, and on EPS basis compared with 59 cents a share a year ago. But the recent earnings exceeded my guestimate, and it looks like the stock is trading only about 7-8 times next year estimates. Short term, I wonder if DSWLF will play catch-up as the Asian markets settle down, and the Nasdaq extends its recent rally. I think we are suffering from small cap (micro-cap) syndrome here, as well as a credibility issue with Asian managements exasperated by the Nam Tai report. Over the weekend, I watched a special on Mark Mobius as a reporter followed him around Asia. Mobius made a big deal of how Asian managements routinely mis-lead by not reporting or mentioning problems or downside risks, even though they know that eventually the bad news will come out. Mobius mentioned the importance of reading body language or reading between the lines when talking to management in Asia. For example, one manager will mention that one lines sales have doubled, but ignored the fact that the company has limited capacity to produce that product line, or that the margins on the other lines are declining. Mobius made the point over and over, that Asian communication standards or norms are very different than American norms regarding full disclosure. Given the large number of "bargains" on NASDAQ today, it may take awhile (tomorrow? - ggg) before the interest turns back to fast growing but riskier small caps. Look at the big multipoint moves by Jabil, Solectron, Flextronics, Smart Modular, Sanmina etc today. A lot of money is coming into the sector, but its first being directed toward the bigger cap growth names. I hold; wish I had the wherewithal to buy more. Paul