We believe new portfolio holding Dolby Laboratories (DLB, Financial) fits this bill. Dolby’s brand has become increasingly known for premium audio in movie theaters, but its pervasive technologies underpin the audio experience consumers enjoy across a host of devices, including televisions, sound bars, computers and mobile phones. Installations of Dolby’s highly visible theater systems have understandably come to a halt during the pandemic, but this hiatus has overshadowed the steadier parts of Dolby’s business and degree to which content creators increasingly treat their audio technologies as industry standard. We also see potential should health concerns permanently shift consumer preferences toward greater demand for in-home, immersive audio entertainment. Finally, the company’s nascent video technology and substantial net cash position create additional upside optionality.
From Wallace Weitz (Trades, Portfolio)'s Hickory Fund second-quarter 2020 commentary.
