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

To: Ron Bower who wrote (792)	6/5/1998 9:06:00 PM
From: j rector	Read Replies (1) \| Respond to of 1418

Ron, Here is how I (personally) would value it. Over a 5-10 year period, returns from an index fund probably would run about 12%, maybe as high as 16% in the last 5 year period. In principle, the fund diversification has decreased the risk to far lower than this particular company. If I couldn't expect 20%/year cash return, I wouldn't buy it. OK, for 20% cash return per year for 5 years, we need 5 times what the cash payout is , say, in year 3. At 25% growth from $3.00, We should be at $5.00 + by year 3. Multiply this by 5, and add present book value. I get about $34/share. So.... I wouldn't pay more than $34/share for the company. I would consider the stock a major bargain if I could pick it up for under $25/share.