Dolby Laboratories, Inc. (DLB)

ll0o0ll (97.64) Submitted: 8/19/2008 12:50:39 PM : Start Price: $41.71 DLB Score: +17.90

Dolby is a diversified way to play growth of electronic devices without exposure to pricing pressure in the industry. Inflation related covenants will help to increase top line in a high inflation environment we are facing. The company will also benefit from coming transformation of cinema screens to 3D, adoption of digital TV, growth in game consoles and PCs powered by Vista Premium editions. There are also opportunities outside the traditional sound business (Dolby Contrast, Dolby Volume etc). The company is one of the most profitable franchises globally. PEG = 0.5x. FCF yield (09/08) = 7.4%.