Q: In the past when I've been down 35% on a stock it was easy to know why, ADF Group has me a little puzzled and am considering throwing in the towel. Thoughts please.
5i Research Answer:
DRX is a cyclical business. As a result, its earnings and share price can be highly volatile over the years. DRX is trading at a very cheap multiple of 4.8x Forward P/E, and management has been repurchasing shares aggressively in recent quarters. We think investors need some patience with the name. We think DRX could potentially see a significant recovery in the next cycle if earnings reaccelerate over the next few years.