Q: These two stocks are showing some momentum in a lackluster market.
Peter, could I have your update on these two and whether you see them as a good investment at this time.
Thanks for your great service.
David
Peter, could I have your update on these two and whether you see them as a good investment at this time.
Thanks for your great service.
David
5i Research Answer:
KITS's quarter was better than expected, and it is seeing some broker upgrades. With market cap now firmly above $100M, more investors are interested. The balance sheet is fine, and cash flow was positive in 2022. It is very tightly held with insiders at 35%. We think it looks good for a higher risk momentum small cap. DR is cheap at 7X earnings, with a 3.7% dividend. Debt is fairly high and there is not much growth. EPS was higher eight years ago. It has cut its dividend in the past. While its valuation is interesting, we would have less interest in DR, with EPS expected to decline in 2024.