Tuesday, May 30, 2006

Body Armor Purveyor Gets Smoked

Shares of DHB Industries (DHB) are down nearly 70% since we urged investors to dump shares of the body armor manufacturer.

The company's Point Blank division sells protective vests to governmental entities, whose need to protect our soldiers in Iraq is obvious. The stock hit a high of $22.53 in December 2004, but it's been all downhill ever since.

The company recently got a Wells notice (given out for securities violations). The company lied about its net income numbers (accounting chicanery) and it got whacked off the AMEX because it didn't have enough independent directors on its Board (e.g. DHB doesn't give a rat's ass about shareholders). The company has also been charged with insider trading and its last CFO left after just 21 days on the $400,000+ a year job (we wonder what he saw scribbled on the bathroom walls).

In a word, you have all the elements of a stock begging for a haircut. Is there any hope for DHB? Surprisingly, yes. The firm says it has a backlog of $226 million dollars worth of orders. Keyword: says.

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