Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Dolby Laboratories, Inc. (DLB), Amphenol Corporation (APH): The Road to Short-Circuiting Your Portfolio?

Page 1 of 2

Getting into mid-cap stocks is a weird place. On the one hand, they tend to have less room to grow than their tiny counterparts. While Dolby Laboratories, Inc. (NYSE:DLB) is only a $3.2 billion company by market cap, it’s still larger than a lot of companies and is thus less likely to experience a huge upsurge in spite of turning 26% profit margins that could easily go into making sound dampening and audio compression even better. Plus, after almost 60 years in the sound innovation business, it’s hard to imagine that Dolby Laboratories, Inc. (NYSE:DLB) is suddenly going to skyrocket in value in spite of its relatively low P/E ratio as of this writing.

Dolby Laboratories, Inc. (NYSE:DLB)If anything, Dolby Laboratories, Inc. (NYSE:DLB) might just be stuck in the doldrums between the bootstrapping startup and the picture perfect success story. It’s a strange place for a company to be.

Midcap stocks are a mixed bag because they also don’t offer the reasonable security that larger companies do. After all, Molex Incorporated (NASDAQ: MOLX) isn’t Wal-Mart Stores, Inc. (NYSE: WMT). While there is very little correlation between companies that aren’t heavily debt laden and their stock prices, there is a certain comfort to knowing that a lot of other people trust and value the company enough to make it huge and pricey. In today’s market, a $4.8 billion market cap isn’t too pricey, even if it’s trading for almost double book value and over 17 times earnings.

Molex sells over 100,000 products. Is that not enough to completely dominate everything network switch-related, or is that too much of a disorderly pile to properly delve into a market that could use a serious provider of one great thing? My knee jerk response would be to say “who can make 100,000 things well?” Off the top of my head, it seems like Post Holdings and J&J fit the bill fairly nicely as far as companies that somehow hold together insane numbers of different offerings.

It’s not even as if Molex and its like are simply toiling away in obscurity working for back-end-of-nowhere companies. Since its early days Molex has been working with the like of GE, and it even produces military hardware. So there’s definitely money coming in feeding those roughly 7% profit margins.

Maybe the difference is that mid-cap companies have a less public face than their larger or more ambitious counterparts.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!