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

To: Ron Bower who wrote (475)	2/20/1998 7:12:00 PM
From: kolo55	Read Replies (1) \| Respond to of 1418

Deswell should trade at least 10 times forward earnings. At a rock bottom valuation that is. Since the latest Q run rate is about $3.00 a year, my target is 30 at least. I don't know what the market will do though either. I do know you have to compare this with foreign stock valuations, and I understand the average PE in Hong Kong is about 8. But this isn't a real estate company or some other low growth manufacturer with loads of competition. The business this company is in requires some smarts, specific technical knowledge, and good customer contacts. So it should get a premium PE. Its about time for another IBD article :)) Only then I might be tempted to sell some. I agree that the weakest part of the report was the modest 5% sequential revenue growth, although the last Q (SepQ) was a quite a strong quarter for revenue growth (up 23% sequentially) and just being able to repeat those revenues was quite a feat. The company facilities are probably pretty strained, and so its logical to hear the facilities expansion plans. I also noted the rise in inventory, but this can be pretty much explained as you did, as well as by the increased stream of production. Give the market time to digest this report. Remember this is a micro-cap without much analyst coverage. We could still trade back up into the mid-20s relatively soon. I don't see a tide of sellers at this level. Paul

To: Ron Bower who wrote (475)	2/20/1998 7:16:00 PM
From: Brooks Jackson	Respond to of 1418

Ron, Paul, all: Thanks for the good work on this thread. You have helped educate me about this company and today is a well-earned payday for all. And I guess my post on earnings being announced Monday shows about how much we can rely on the NY p.r. firm for accurate information, eh? Not that I'm complaining today.

To: Ron Bower who wrote (475)	2/20/1998 11:46:00 PM
From: j rector	Read Replies (1) \| Respond to of 1418

>>The next Q (4Q) will have costs of the newly acquired facility plus shipping and installing of the Toshiba machines. Ron, do you know how DSWLF is planning to account for the facility purchase? Will they put it all in 4Q. Likewise, will they put all the costs of installing the Toshiba machines in 4Q. Another expense will be the depreciation of the Tosh machines. I wish they had a CC. I'd love to listen in.

To: Ron Bower who wrote (475)	2/20/1998 11:55:00 PM
From: j rector	Respond to of 1418

>>Minority interests represent the 49% and 66.9% minority interest in the electronics and metallic subsidiaries respectively. Ron, given the huge growth in these areas, why wouldn't DSWLF buy both of these two out (I know you thought they were going to use funds to buy Kwanasia)--or is there some type of financial incentive for them to stay independent. I guess I may be answering my own question here, but given the huge growth in the buisness, if DSWLF continues to fund the expansion the minority interest will gradually decline. Anyway, food for thought.