Why Dynasil Corporation (DYSL) Exploded on Monday

NEW YORK (TheStreet) -- Shares of Dynasil Corporation of America (DYSL) exploded on Monday after the company announced its subsidiary Optometrics Corporation had signed a three-year comprehensive supply agreement with a division of L-3 Communications.

Optometrics will provide high-quality optical components to L-3 Communications, a developer of intelligence, surveillance and reconnaissance technology.

By midmorning, shares had soared 55.8% to $1.90. Trading volume of 2.9 million was more than 43 times its three-month daily average.

"It is an important piece of business for us, which will bring Optometrics' technology to a highly technical and competitive industry. Optometrics' creative approach to product development and production scale-up were key determinants in the selection process," said Dynasil CEO Peter Sulick in a statement.

The company expects to deliver more than $4 million in product to L-3 over the life of the agreement and will add approximately 15 new jobs at Optometrics to scale production.

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TheStreet Ratings team rates DYNASIL CORP OF AMERICA as a Sell with a ratings score of E+. The team has this to say about their recommendation:

"We rate DYNASIL CORP OF AMERICA (DYSL) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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