Q: With 3 quarters behind them and an announced backlog of almost 2 years worth of work, how does one go about valuing this company? I can't find any direct public comparable that trade in Canada.
5i Research Answer:
DRX operates a pretty unique business and is a small cap stock, so an exact public comparable is hard to find. Some options for comparables in the industry would be IVX, TSL, BDT, and WSP. It can be valued on P/E (6X, very cheap). Margins are low (gross margin 14%) so we do not think pirce/sales is a good metric. It is about 6X price/cash flow (operating cash flow).