RE:RE:RE:RE:RE:RE:RE:RE:New research from Cormark
mrmoribund wrote: Thanks for the thoughts on DCM. It is a very neat story and cheap by most metrics.
BUT they have a lot of debt coming due soon. Take a look at note 8 of their Q3 report. Term loans (fixed rates) coming due March 10 ($6 million) and May 15 ($1.5 million). Almost $16 million in floating rate debt, all coming due in 2024.
This is surely what is scaring the market.
That said, if operations can be strong enough to keep the financing situation in order then, yes, the stock will probably do very well.
The company has strong free cash flow generation. Let's look at the financials.
In the Q3 financials section 8, I get the following:
$939k due on Oct 15,2022 at 6.1% interest
$6,049k due on March 10,2023 at 6.95% interest
$1,475k due on May 15 2023 at 6.95% interest
$6,859k floating rate debt due on May 8,2024
$8,869k floating rate debt due on Nov 8, 2024
$9,822k due on Dec 15 2026 at 5.95% interest
In total they have $33,655 in credit facilities which includes both the long and short amounts. For the 9 months ended 2022, the company has repaid $ 8,921k in debt and $10,277 for the year ending 2021. They will have no issues paying off its debt for the 2023 and 2024 year. The cash they generate is substantially higher than the amounts given above for the debt repayments.
They are in a position of financial strength. This is a great turnaround story. A great new ceo who has been doing anazing things in such a short time.