Wednesday, March 09, 2005

Stock of the Week: BOOM

It's not Martha Stewart OmniMedia, although I had that one in mind. This weeks superstock is BOOM, alluring ticker symbol of Dynamic Materials, a metallurgical bonding and metal cladding company. will discover the company with the "BOOM" stock symbol (its largest operating business, with 95% of sales, named the Explosive Metalworking Group uses a proprietary explosive process to perform metal cladding) is still, shall we say, booming. Propelling this exploding stock price growth has been outstanding business performance. Fourth-quarter revenue increased 126%, net income swung from a $0.6 million loss to a profit of $2.3 million (a solid $.41 a share vs. an $.11-per-share loss in the year-ago period), and the EMG backlog is at a record $27.5 million.

Driving domestic demand has been the refinery industry's need to comply with 2006 clean fuels regulations. Also sparking demand has been a $5.5 million contract for nickel project in Australia...

Investors would also be wise to note the company has a net debt (debt minus cash) of $10.1 million. Although the company is clearly growing, solidly profitable, and not planning to increase debt, it is still in a cyclical industry and debt-heavy. Dynamic Materials, with only 5.2 million shares outstanding, is a Lilliputian compared with giants such as Cisco, with 6.5 billion shares. Not only is it small, but it also is not covered by Wall Street's analysts...the company has hired an investor relations company to get its message out--in 2005, the budget for capital improvement and expansion will double, boding well for accommodating future increases in business.

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