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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!