Why did Roth Capital Upgrade Dynamic Materials Corp.’s Stock?

By Carrie Williams

Dynamic Materials Corp. (NASDAQ: BOOM) received a Buy rating and a $14.50 price target from Roth Capital analyst Gerry Sweeney today. The company’s shares opened today at $10.60.

Sweeney wrote:

“We upgrade BOOM to Buy based on our belief the unconventional market has bottomed and spending will likely significantly accelerate in 2017 and 2018. Our projection is based on recent uptick in service activity and commentary by BOOM, Core Labs and Halliburton among others. In addition, BOOM has continued to take market share during the downturn which should likely expand as it continues to add customers in its DynaSelect and DynaStage products. Finally, the company is positioned to reaccelerate margins. Service companies indicate a turnaround is underway especially in the unconventionals which provides the “fastest barrel of oil and quickest return.” On its 3Q call, BOOM indicated a pickup in activity in the DynaEnergetics segment in the second half, which has continued into 4Q. In addition, IHS data suggests 40%+ increase in completion activity in 2017 over 2016. Halliburton estimates a 50% expansion in capital spending. We estimate BOOM has increased perforating market share to 15%, up from 7-8% in 2014. BOOM’s DynaSelect and DynaStage products continued to gain market share during downturn as they offer efficiency and safety . Further, the DynaStage product eliminates field assembly crews for perforating, reducing service company hiring requirements. The product has been adopted by six companies, up from one in 2015.”

According to TipRanks.com, Sweeney is a 2-star analyst with an average return of -0.7% and a 38.2% success rate. Sweeney covers the Industrial Goods sector, focusing on stocks such as Heritage-Crystal Clean, Calgon Carbon Corp., and Ceco Environmental.

Dynamic Materials Corp. has an analyst consensus of Moderate Buy.

The company has a one year high of $12.38 and a one year low of $4.84. Currently, Dynamic Materials Corp. has an average volume of 47.68K.

Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is neutral on the stock. Most recently, in August 2016, Kevin Longe, the President & CEO of BOOM sold 12,500 shares for a total of $146,188.

Dynamic Materials Corp. operates a diversified family of technical product and process businesses serving the energy, industrial and infrastructure markets. The company operates its business through two segments: NobelClad and DynaEnergetics. The NobelClad segment engages in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. The DynaEnergetics segment manufactures and distributes products utilized by the global oil and gas industry principally for the perforation of oil and gas wells. Dynamic Materials was founded in 1965 and is headquartered in Boulder, CO.