Opinions
Bruce Campbell (2)
ADF Group
DRX-T
WATCH
Sep 19, 2024
$11.330
Stock price when the opinion was issued
metal fabricators
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Manufactures huge steel products for high towers. Product is so specialized that there is not a lot of competition. Producing at about 50% capacity so there is good upside in terms of getting new contracts and increasing margins. Doing about 20% EBITDA margins and stock is trading at about 8X this year's earnings. Have good visibility in their backlog until about 2008/2009. Probably no debt by the end of the year.
metal fabricators
TOP PICK
Stockchase Research Editor: Michael O'Reilly
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)
metal fabricators
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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.