DRX has recovered nicely over the past month, but we would like to see its price rise above $9 to help confirm a potential reversal in its negative trend. It is quite small ($215M market cap), it operates in the steel industry, which is exposed to tariffs and trade policies, and growth has been quite volatile. Although, its margins have been expanding nicely, and it trades at a cheap valuation of 7.6X forward P/E. It generates a good amount of free cash flow and repurchased almost $55M of shares in the past twelve months. We think it has recovery potential, but we would like to see these price levels hold and price above $9 would be encouraging. We would be OK with holding here, unless its price or next its earnings report show a material change.
5i Research Answer: