Q: do you see any hope on this stock. You removed it from your Growth portfolio a long time ago. I am way underwater on this.
Thanks Jim
Thanks Jim
5i Research Answer:
DRT remains small and risky, but is at least up 33% this year. Cash flow did turn positive in 2023 after two years of losses. Sales rose 11% in the Q1. The recent rights issue at 35c and the buyback of some debentures has improved the financial picture, though it still had $50M net debt vs $20M cash flow. Two shareholders now own 57% of the company. We think the company is taking the right steps. We do not want to encourage too much hope here, and it remains very much on the risky side of things. But margins have improved, and the stock seems to have at least bottomed. This is not a buy recommendation but we think a holder who has kept it this long can give it a bit more time to see if this turn can be sustained.