RE:Tax Loss SellingYou're right. In the end, money in the bank will prevail. The company is on track for around 50-60M+ net income for 2024. Divide that by about 27M shares, and you get around 1.85-2.2$ per share just from this year's net income. Assuming the company stops operating in 1.5 months, starting in 2025, the lowest we can go is around 3-4$, accounting for their current strong balance sheet. The funny thing is we're not that far off at about 9$ a share and this is assuming the worst. It doesn't make sense for a growing company trading near net asset levels. The sell off is completely irrational.
It doesn't matter why the sell off is happening. What matters is what the company is actually worth. The family selling, the smaller backlog and subsequent macro fear, the trump fear, the tax loss selling, the Barwick selling, the deferred revenue are all potential reasons for the selloff. Every one of these elements have been discussed on this forum and they have one thing in common: they don't reflect the business execution. Worrying about a smaller backlog in a contract business without looking at the growing trend is absolutely insane. What matters is that the company makes a lot of money and that's what they're doing. The company's been around for almost 70 years and they just recently figured out how to make a lot of money with their expertise.
The S&P is priced to perfection, and DRX, a growing company, is priced to go bankrupt soon. Family selling doesn't cause business fundamentals to plummet and lead to bankruptcy. The way they did it shows no knowledge at all in public relations and it came off as very disrespectful to some investors. Because of the small float, the large selling pressure from every investor could've easily overwhelmed the buyers. Keep in mind most normal people have no clue ADF group even exists, so if only like 100 people know about this opportunity there's not enough buying pressure to keep the price up. Most people just let their banks charge them 2% management fees to buy an index fund and steal from their retirement funds and they're really happy about it.
In my opinion, we should be observing if new projects keep appearing like what microcaphobby does because that's how ADF group will get work. The share price can't possibly go lower than 8$ realistically. The biggest risk is if ADF has no work, but management says they can be choosy, so I assume if the CFO is not lying, jobs are plentiful now. Then there's the massive Eli Lilly project. Labor is not an issue, as the labor agreement extends to 2028. The management has it very easy now. Any slightly positive news and investors will be reassured and the stock price should recover.