Texas (12/24/2013) – Dynamic Materials Corporation (Nasdaq: BOOM) – No Investment Interest based on a recent price of $22.51 and a fair value estimate of $31-$36.
The company manufactures explosion-welded clad metal plates, and oil and gas well perforation products; and provides welding services worldwide.
My issue with the stock is that pricing has far outstripped the company’s ability to earn with a one- year price increase of 61% versus a 3% y-o-y decline in sales, a 44% y-o-y decline in free cash flow, a 39% y-o-y incease in debt, a 2% y-o-y decline in earnings and goodwill/intagibles that make up 34% of total assets which could impact the company’s ability to borrow.
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