Post by
ykzsh8 on Jul 06, 2024 1:53am
Macro isn't good for DRX short term
After the unemployment numbers came out in the morning, the Canadian stock market tanked till market close. Meanwhile, USA stocks steadily climbed today. This gives me the impression sellers of DRX are retail investors selling for macro reasons. Meanwhile, I speculate that people with deep pockets are floating out buy offers here and there, taking advantage of the fear in the market. People may also be selling simply to cover bills. Some may be early investors cashing out at their stop loss price. These retail investors trimming or exiting their positions represent over half of the DRX market cap.
But in my opinion, DRX is immune to these macro conditions. Labour agreement at DRX extends to 2028 and when they eventually hire more people to take on future contracts in a growing infrastructure industry, there will be a pool of labor waiting to apply.
The share price drop presents a nice buying opportunity ahead of the next earnings, while sentiment is still negative due to macro and due to the insiders rebalancing their portfolios. Haven't sold any shares since opening my position last year. The impressive growth in Q2-2024 still isn't priced in yet and I doubt the company will shrink in Q3. I can't wait for September 5th.