Monday, February 7, 2011

Buy Dolby (DLB)

Recent Activity:

There has been a large overreaction/sell-off of Dolby stock.  DLB has dropped more than 14% over the past two days.  According to investment website fool.com, "Shares of Dolby Laboratories (NYSE: DLB) fell as much as 12% on heavy volume after the company reported market-beating financial results for its fiscal first quarter but reduced its guidance for full-year revenue."

Profitable and Growing Company:

Dolby is clearly the leader of its field with the highest operating margin of over 48%; the next highest operating margin in the industry is just over 27%.  In addition, return on equity and return on assets are over 20% and 16%, respectively.  Even though Dolby reduced its guidance for full year revenue, revenue has been growing very nicely; revenue has grown 39% from last year.

Michael R Caligiuri owns stock in Dolby

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