Dolby (DLB) shares may be worth as much as $43 (currently trading around $34) even assuming declining growth. The company has a rock-solid balance sheet, no long-term debt and has been able to grow and transition effectively for decades. The company has a 14.5X PE net of cash and has grown earnings in eight of the past ten years. This year will not be a great year due to the end of a product refreshment cycle, but the company is positioned for excellent growth as the media industry shifts and content distribution channels develop.
Although the mobile hardware revolution has lifted the entire technology sector, the consensus is that the hardware market has matured and is...