3SOF

As said I sold DHB at the open, price $8.60.

I bought DHB at $8.88.  Stop is a close or obvious late day tank below $8.25.  Risk is 7%.
I've been following it since it was a 3SOF.  I like the 3 chart patterns.  Today, DHB printed above the recent trading range high of $8.90 (Pattern in black).  Looks like it could be ready to take out the top of the entire range (Pattern in blue)

Hi Melf Elf,

I also like DHB but probably for different reasons. They have a backlog of Bullet proof vests that they can't deliver due to a shortage of Kevlar which will be resolved in H2 when a new factory is finalized. In addition to this one of their main competitors seems to be going out of business (some of their bullet proof vests was not so bullet proof!)

It is not all good news though. Brooks who bought the company out of bankruptcy has a bad habite of giving himself stock options. Even though it is insignificant compared to the earnings of the company it still p.. off a lot of shareholders.

All in all you should see a run up in H2. This might be too long time for some people on this board but good enough for me. As you said the downside is very limited.

I like to think about this as a bullet proof investment 

QuoteI like to think about this as a bullet proof investment 

Michael,

I give you applause for your fundamental analysis.  I didn't even know what this company did, I get so busy with trying to analyze charts!   

You do a great job at the fundamentals, and I really appreciate it.  Let's make some $$$ on this one (and, others)   

QuoteToday, DHB printed above the recent trading range high of $8.90 (Pattern in black).  Looks like it could be ready to take out the top of the entire range (Pattern in blue)

Okay, Michael, we gapped up at the open, above the rectangle (Pattern in black), and we're at the top of the entire range (Pattern in blue).  DHB currently is 9.35 BID ... 9.37 ASK, up $0.47.  The technical breakout is a print of $9.37, which we just got.  I'd like to see the June 22 high of 9.45 get taken out.

DHB was rightly punished for a disappointing Q2 report.

Earnings were flat at 0.17 per share and revenue grew only with around 2%.

The fundamentals are however still strong. As said previously the shortage of Kevlar has hampered the growth of the company. This issue should be resolved later this year when Dupont opens a new factory.

The sector is extremely hot with the focus on terror.

The industry is under consolidation

They generate a lot of cash every quarter

It is now traded with a PE below 10.

I believe the stock will bounce from here and that they will surprise on the upside in Q3. I have therefore bought DHB at 6.72.

Mike

Not much news about DHB but the uptrend continues. It seems like we are in the process of forming a reverse head and shoulder formation.

DHB is fundamentally undervalued so I would expect a significant increase from here.

Hmmmm I love the technical setup – very prophetic title for this thread. I really love the technical setup. This is one of the most perfect inverse head and shoulders I have seen.

Left and right shoulder is symmetrical, volume is higher at the left shoulder and head.

Only one thing is missing and that is the breaking of the neckline. I do however feel that this is just a matter of time.....

Hey Michael,

   I am a rookie when it comes to TA so I won't doubt you there,  but i was curious....I've seen you mention you are big on fundamentals and that this company is undervalued based on key statistics. I can't tell if the growth of the company has a positive outlook,   Do you forsee good growth potential based on future contracts that would essentially attract investors.  Thanks... 

Hi Patriot

I have to say that this is a very appropriated name when we talk about this company 

I could write two pages about why I believe in DHB but let me instead show a few pictures:



Hmmm.... That is what i call a proven track record!

So what is driving the growth:



DHB is a clear market leader:



I am therefore confident that they will continue to grow there net profit:



This is the short version of why I believe that a company like DHB in a world that is more and more concerned about security is fundamentally undervalued when it trades at a PE around 10!

Mike

 

   Thanks Mike,

     It does look impresive and and I certainly agree with the increased demand considering I am a soldier myself and use body armor everyday.  I don't think we are wearing DHB, I think it might be Point Blank. I will look and see if they are a valid competitor, most likely the military went to the cheapest bidder. But this definitely looks interesting I appreciate the input.

I was reviewing my watch list and saw that something went bad with DHB. Here's the news and some analysis from a fool:

«DHB Industries,  Inc operating principally in the growing field of body
armor,  announced on August 30, 2005 that,  although it remains confident in the
safety  and  performance  of its body armor  products  containing  Zylon(R),  it
discontinued the use of Zylon(R) in its bullet resistant  products on August 24,
2005. The Company ceased production of all Zylon(R)-containing  bullet resistant
products due to the National Institute of Justice's (NIJ) decision to revoke the
NIJ's previously issued  certifications of all vests containing  Zylon(R) in the
marketplace. The Company also announced that it will be implementing a Voluntary
Replacement Program to assist its customers who presently have non NIJ-compliant
Zylon(R) body armor.

         This Voluntary Replacement Program is not a product recall. This action
is a result of the  de-certification  by the NIJ of body  armor  with  Zylon(R),
which will  result in certain  customers  having  body armor that will not be in
compliance  with the new NIJ  requirements.  This  program  will  assist the law
enforcement  community in replacing its Zylon(R) body armor with,  NIJ-compliant
body armor.

         The Company will record a charge to third  quarter  earnings to account
for the anticipated  cost of the Zylon(R)  Replacement  Program and discontinued
sales of products that contain Zylon(R).  The amount of the third quarter charge
has not yet been finalized, but is not expected to exceed $60 million.»

And the Fool's analysis: Somewhat Less Than Bulletproof

Since the company is expected to take a big charge on the third quarter, perhaps the best time to buy will be when the news is out. I will take a daily look at DHB's chart, I guess this company will come out ahead of this over the long term and the present sell off may be a wonderfull buying opportunity. But I usually don't try to catch falling knifes, so I'll be looking for DHB to make some base and then reverse trend to buy.

Good luck 

I want to thank all you guys who jumped in on this one while people like me stood on the sidelines. DHB looks like it will be a winner when the right entry point arrives.

Before I found 3SOF I had to buy 5 or ten shares of every stock that intrigued me, just so I'd be motivated to look at it more carefully...even without the winners DR and others have provided, this ability to look over the shoulders of other traders is worth its weight in BIDU certs.

I want to apologize to everybody (if any) who followed my recommendation on this stock. There is unfortunately not something like a sure wiinner and DHB was certainly not a winner.

I think that the correction is overdone and I am considering to add here. I am not usually averaging down (on the contrary I prefer to add shares when I already have a solid profit like AOB and VPHM!) but DHB is still a healthy company and the Zylon replacement is a once of event.

Now this is not a buy recommendation.

Shares Outstanding:   45.38M. So, if they take a 60mill hit, plus the 11 mill non cash expense for the issue of cheap options, in Q3, that is worth about 1.50 a share. The stock was a compelling buy at $4.50. But, I really disliked the way mgt treated outsider shareholders. and I still do. So I will stay out. If I make dollaros on BRVO, I might hold a few to buy back in if this baby goes into freefall again. Don.