Q: just wondering what the market is telling us about DRX?
Are you still in favor of this company and if so why?
You think a Trump presidency will affect DRX?
Are you still in favor of this company and if so why?
You think a Trump presidency will affect DRX?
5i Research Answer:
We like its fundamentals and valuation, but recent momentum has been quite negative, and we would prefer to assess once its price finds a floor. Its upcoming earnings could be a catalyst, but the selling has been consistent.
We think a confluence of factors have negatively impacted the stock: contract timing which pushed out revenues, volatile raw material prices, and competition in the steel fabrication space. A general sluggishness in global economic activity can also have an impact on sentiment around the name. We think a Trump presidency could have an impact, but overall we feel that patience and clarity from its next earnings report will be needed.