Have you heard of this company? DLB

In previous posts, we have discussed some of the characteristics of a Taylor Frigon growth company, and have highlighted some examples -- most recently Tractor Supply and Resmed.*

With Oscar weekend approaching, and plenty of buzz in Hollywood about 2009 being the "year of 3-D," we thought we would highlight another growth company, Dolby Laboratories.*

While most consumers are familiar with the name Dolby, because the company licenses their technology to manufacturers of consumer electronic equipment, many do not realize that Dolby equipment is also used by almost every professional studio in the production of music and movies and other professional media content (such as the Dolby-E encoding equipment pictured above).

And while moviegoers may have thought that 2009 was the year of 3-D, with the blockbuster success of James Cameron's Avatar (featuring Dolby 3D) they may not be aware that seventeen more big-name 3-D films are set to hit the screens in 2010, including another edition of Shrek, another Friday the 13th, a third Toy Story, and the return of Tron in Tron Legacy, as well as several others. Many will feature Dolby 3D, in addition to all the Dolby technology that is used in other aspects of movie production.

The dawn of modern 3-D may well transform the home theater as well, with Sony recently announcing a $200 3-D blu-ray player and Philips announcing 3-D LCD televisions to ship this summer.** Remember that Dolby technology is licensed by many consumer electronics manufacturers, who see Dolby as an essential partner (Dolby long ago decided to license their technology rather than make consumer electronics gear themselves, opting for the role of partner rather than competitor to the consumer electronics companies).

We believe that focusing on the fundamentals of well-run businesses in front of fertile fields of growth is important for investors in all economic environments, and that they can be reminded of that concept the next time they hear the media talking about the business of entertainment.

* The principals of Taylor Frigon Capital Management own securities issued by Tractor Supply (TSCO), Resmed (RMD), and Dolby (DLB).

** The principals of Taylor Frigon Capital Management do not own securities issued by Sony (SNE) or Philips (PHG).

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For later posts dealing with this same subject, see also: