Broadpoint is out in defense of Dynamic Materials Corp (NASDAQ:BOOM) following results out last night:
According to the firm, a weaker than expected June quarter may require stronger ramp in the second half for the company to meet its unchanged CY08 guidance. They continue to believe in the long-term growth and would be buyers of this quality name on any weakness.
The company's backlog for explosive metalworking was up slightly to $102M at the end of the March Q vs. $100M in December. This was once again, in-line with firm's expectations of a "stable" backlog.
The company left its CY08 guidance of 60% Y/Y revenue growth (due to the DYNAenergetics acquisition) unchanged but 2Q:CY08 results are expected to be at the same level as 1Q:CY08. This was below consensus estimates of $0.56 on $64M. A weaker than expected June Q may require stronger ramp in the second half for the company to meet its unchanged CY08 guidance.
On the conference call, management talked about significant price increases and tension in the supply chain of high-quality carbon steel. Broadpoint believes in the worst case, this may lead to
some timing risk but clearly not lost business.They believe long-term business fundamentals remain strong and recommend that investors continue to add to positions on any pullback. They reiterate their Buy rating and $58 price target (20x CY09 EPS estimates of $2.90) on the stock.
Notablecalls: I think BOOM represents a good bounce play around the $40 level.
According to the firm, a weaker than expected June quarter may require stronger ramp in the second half for the company to meet its unchanged CY08 guidance. They continue to believe in the long-term growth and would be buyers of this quality name on any weakness.
The company's backlog for explosive metalworking was up slightly to $102M at the end of the March Q vs. $100M in December. This was once again, in-line with firm's expectations of a "stable" backlog.
The company left its CY08 guidance of 60% Y/Y revenue growth (due to the DYNAenergetics acquisition) unchanged but 2Q:CY08 results are expected to be at the same level as 1Q:CY08. This was below consensus estimates of $0.56 on $64M. A weaker than expected June Q may require stronger ramp in the second half for the company to meet its unchanged CY08 guidance.
On the conference call, management talked about significant price increases and tension in the supply chain of high-quality carbon steel. Broadpoint believes in the worst case, this may lead to
some timing risk but clearly not lost business.They believe long-term business fundamentals remain strong and recommend that investors continue to add to positions on any pullback. They reiterate their Buy rating and $58 price target (20x CY09 EPS estimates of $2.90) on the stock.
Notablecalls: I think BOOM represents a good bounce play around the $40 level.
3 comments:
Great call on OMPI!
I'm looking stupid with my $40 entry on BOOM. Managed to get my avrg down to around $36 & exit with some grace.
This stock is controlled by the shorts at the moment. Fors the first 3 hrs they spent chopping down any upside attempt. Tough.
oh well,
An analyst is the guy that tells you why your stock is down 20%.
What does that make me? :(
It is ok..to me it looks like that coldwater creek call last year. Bad from the onset
I guess one big thing was overall bearish sentiment in the commodity markets on Friday.
Other thing I guess was the statement by the firm that they are optimist about price and that is only way they can manage the guidance for the year. In todays environment, it is tough to believe that anyone will be able to sustain prices once slow sets in.
These are two ways I am consoling my loss in this trade :)
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