Benj Gallander Deswell Industries Inc DSWL-Q PAST TOP PICK Dec 14, 2012

(A Top Pick Aug 25/11. Up 28.11%.) Chinese company in metal and plastic fabrication. Great balance sheet with over $30 million in cash. No debt. Revenues went down about 20% year-over-year. They managed to just about break even again. Declared a special dividend again. Conservative management. Have cut costs dramatically. Can see this one in double digits when things recover.

Cut and then reinstated their dividend and it’s a pretty nice payout. Management is fairly conservative. Revenues have slipped quite a bit as there is a lot of competition. Have absolutely no debt and cash in the bank, which is a good thing. Dividend yield of 8%.

Had thought about taking a tax loss on this last year. The major problem is that revenues keep on going down. Down 22% last quarter. However, the Book Value is almost $6. No debt and about $25 million in the bank. They keep paying a dividend so he thinks people keep thinking it is going to go up. Target price of $11.

Metal/plastic fabrication. A Chinese company, so this gives him some diversification. Revenues have come down a tremendous amount, about $40 million from over $100 million at one point. Has a yield of 9.3% payable quarterly. Has a lot of money in the kitty, plus if you add in the cash equivalents that they have, it trades for less than cash value. It’ll be interesting to see what happens this quarter with their new CEO. One of the few losers he has so it is a conundrum for him. On the one hand, it has so many good things going for it, clean, clean balance sheet with no debt and on the other hand, when revenues fall that much, it is a danger signal.

(A Top Pick Jan 8/14. Down 7.83%.) Sold his holdings at $2.14 and took a tax loss. Had bought this at $3.04. This is a funny company. They have no debt and they pay $.05 a share every quarter as a dividend. Have pretty good revenues, but they have been cascading downwards.

(A Top Pick Jan 8/14. Down 9.19%.) Sold his holdings in the $2 range. It looks like it has so much potential. Trading at about a 3^rd of its BV, has no debt, and has cash in the bank. The major problem is that they keep on losing revenues. If they can continue the dividend and start moving into black ink, it could be a Buy for him again.