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Dynamic Materials Corporation Stock Upgraded (BOOM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Dynamic Materials Corporation (Nasdaq: BOOM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • BOOM's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BOOM has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 192.88% to $4.40 million when compared to the same quarter last year. In addition, DYNAMIC MATERIALS CORP has also vastly surpassed the industry average cash flow growth rate of -19.03%.
  • BOOM, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Machinery industry and the overall market, DYNAMIC MATERIALS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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Dynamic Materials Corporation, together with its subsidiaries, manufactures explosion-welded clad metal plates, oil and gas perforating products, and welding services worldwide. It operates in three segments: Explosive Metalworking, Oilfield Products, and AMK Welding. The company has a P/E ratio of 17.4, below the S&P 500 P/E ratio of 17.7. Dynamic has a market cap of $214.4 million and is part of the industrial goods sector and industrial industry. Shares are up 12.2% year to date as of the close of trading on Monday.

You can view the full Dynamic Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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