DLB (Dolby Laboratories Inc.)
Jan 23, 2007
Dolby is a household name and has enjoyed increases in consumer entertainment trends. In November they announced earnings and suprised significantly on the upside. Sales are increasing and the demand for their products in many different types of entertainment vehicles should continue to be strong.
The company makes most of its money through licensing its technology so margins are very robust. There is a bit of concern that the conflict of which HD DVD format will become the standard may cause consumers to delay purchasing new hardware. However, there are many other vehicles for DLB to excel in and to offset any weakness that may occur in the DVD area.
The stock followed through after the November announcement and has picked up significant volume. It has pulled back to the 50 day and seems to be rebounding in respectable volume. This seems a lower risk area to get involved and I think the technology could drive this stock significantly higher over the next few years. I took a 3% position to start with today and will monitor for opportunities to add to that.
Feb 16, 2007
Somehow I neglected to post earlier that I sold calls versus my entire position when the stock broke to a new high but then could not hold that level. It just signaled to me that there was some risk that I may need to protect against. So far the calls have not brought me any additional return but have helped lower my volatility. They are March 30's so they are well in the money and give me plenty of stability.
The stock followed through after the November announcement and has picked up significant volume. It has pulled back to the 50 day and seems to be rebounding in respectable volume. This seems a lower risk area to get involved and I think the technology could drive this stock significantly higher over the next few years. I took a 3% position to start with today and will monitor for opportunities to add to that.
Feb 16, 2007
Somehow I neglected to post earlier that I sold calls versus my entire position when the stock broke to a new high but then could not hold that level. It just signaled to me that there was some risk that I may need to protect against. So far the calls have not brought me any additional return but have helped lower my volatility. They are March 30's so they are well in the money and give me plenty of stability.
If the stock makes a new run and is able to bring in some volume, I will likely add to my position but for now I am just waiting and letting the premium in the calls slowly disapate.
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