Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jmt who wrote (1198)	2/13/1999 11:22:00 AM
From: Bobcat	Respond to of 1418

Well it does appear that a lot of uncertainty does exist here. I think many questions do need to be answered going forward. There is about $5.14 cash per share on the books as of this current report. The company can tolerate a bad quarter or two, but they need to start generating some new business soon, and very soon.

To: jmt who wrote (1198)	2/13/1999 12:05:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 1418

Now annualize the earnings and the company is trading at or above the multiple afforded to its mainland peer group. Firstly, we invested for different reasons. I invested in Deswell becasuse I would like to own a business with this sort of cash-generating power outright at recent prices. I assumed no growth, with a large margin of safety for a decrease in earnings. Secondly, this is a growth cyclical. To freak out over a decrease in earnings during the low part of the cycle (now 1.5 years into the Asian crisis) is irrational. But hey, that's how I make my money. So I encourage more investors to overreact to lower earnings in cyclicals. You want to look at the average earnings power and growth over the long-term, not annualize the current earnings trough. Mike