Data I/O Corporation (DAIO)

[glenrice67]

A few things I took from the conference call that go along with the post below.

They said this year they were spending heavily on R&D over a 9 to 12 month period as they felt that they are now looking to grow given that company is good shape to survive. Even with much higher spending than in 2016, the earnings numbers are much higher than in previous years. The Q&A clarified that this quarters R&D spending would be similar to last quarters. They also clarified in the questions that bookings were likely to level off but not decline.

These apparently weren't one off quarters according to the conference call. Given that earnings are likely to continue to grow when R&D spending declines and a new product launch is happening soon, it seems .20 to .30 a share is very doable next year. At .20 a share and a 20 PE that puts the stock at 16 dollars.

The technical considerations are the stock is holding above highs last seen in 1997 and have broken out of a 20 year range. The stocks volatility has dropped dramatically and there hasn't been aggressive selling, even after the last earnings announcement. The action has been pretty orderly.

The negatives are the price has already quadrupled from last year. You had an options exercise and sale recently. You also don't have much volume which makes it hard to propel the stock.