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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (448)	10/18/1998 7:49:00 PM
From: cfimx	Read Replies (1) \| Respond to of 4691

James, this company develops and sells analytical instruments. They dominate a lucrative niche, ION Chromatography, where they are virtually untouchable. DNEX has a multi year lead on the competiton, which dread competing with them. Technology is patent protected. The devices don't change much year to year like PCs or semiconductors.There is a consumable component to these devices which DNEX sells too. Together with service, this recurring aspect accounts for 40% of total revenue. Markets, which are diverse are growing at low double digits. Buy buying back stock, DNEX has increased EPS well in excess of revenue growth. The company has been hurt by the stong dollar so a weaker one now will help. A Blaine Bowman owns about 6% of common and has been ceo since day one. The same focused board since day one except for one new addition, this year. Focus, integrity, stability, and consistency is the watchword at DNEX. Disciplined beyond belief. Company looks at many many acquisitions but has not pulled the trigger on a major or even minor one in years. For those interested, I have worked up a spreadsheet that helps one visualize the quality of this company. Email me and I will send it. since 1988, the year before the buyback: Dionex highlights over this period No Long Term debt No significant acquisition over this long period Spent over 100% of earnings on share repurchases over last eleven years working capital lower in year 11 than in base year (1988) Shrunk shares outstanding by 35% over eleven years, sales grew 116% earnings per share grew 281% inventory lower as % of sales net margin percentage eerily stable regularly earned 17- 20% on equity although cash has been 50 - 75% of working capital concious effort to distribute cash to owners has increased ROE to 30% range 61% of revenue derived outside of North America Investing 8% to 9% of revenue in R & D Capital expenditures average 20% of net income Issued 10%, repurchased 50% of base years outstanding shares earns an exceptional rate on the sum of its inventory and property, plant and equipment In 1996, spent 2 x net income on share repurchases Record sales and earnings for 18 consecutive years Morningstar has a write up on Janus who raved about this stock. I discovered it a number of years ago and think it should be bought and held.