Deswell Industries is one of my longest held stocks. I bought my first shares more than six years ago on March 6, 2012 and sold my position last week after reviewing the latest annual results. The company isn’t exactly expensive, but it’s not longer a net-net since NCAV is $3.13/share while the current price is $3.25/share. If we take the value of all non-operating assets, and slap a 8x multiple on last years operating earnings we get a very similar value of $3.18/share. So right now Deswell isn’t expensive, but probably fairly valued, and after more than six years I think it’s time to move on to something else. I have always been a bit hesitant to sell this stock because of the years of continues insider buying which at some point in time will probably culminate in a going private transaction. But I don’t have unlimited patience…
Deswell Industries went up 53% in the more than six years that I held the position, and while that is not bad, you would expect a mediocre annualized return. But thanks to all the dividends ($1.04/share in total!) that the company paid in the meantime the internal rate of return was actually a pretty satisfactory 15.10%. Better than I expected before I did the math for this post.
No position in Deswell Industries anymore