Opinions
Grant White
ADF Group
DRX-T
HOLD
Aug 09, 2024
Stock price when the opinion was issued
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DRX is a North American leader in the construction of steel superstructures with business in five continents. Recently reported earnings beat analyst expectations by over 35%. It trades at 11x earnings and has seen its cash reserves grow while retiring debt. We recommend setting a stop-loss at $11, looking to achieve $23 -- upside potential over 40%. Yield 0.1%
(Analysts’ price target is $23.00)Amazing chart over 2 years, not as attractive over last 2 quarters. High expectations, disappointment in numbers, investors started to exit. Ranks well in his longer-term screens, but not short term. He's watching, as there will be huge demand for infrastructure and infrastructure steel.
If you hold it now, continue to hold. If not, watch for the inflection point between earnings and higher margins, as stock price should start to follow. This way, you might pay a bit more, but you'll potentially save yourself some downside.
If you own it, you don't need to run away. Reasonable price. Would like to see improved dividend yield, better valuation. Nothing exciting jumps out, better opportunities elsewhere.