Name: TStates
Question:
So, what do you think of BOOM? It's been on a crazy rally since it hit 4.95 in March. Today it closed 12.37. I'm long and debating if holding through earnings is way too risky.
Answer:
Thanks for the question. Since I don't know where you purchased BOOM it's difficult to give specific advice, but I'll give you a general recommendation. If you purchased at $4.95 then you're a genius and you have no reason to continue reading.
BOOM (Dynamic Materials Corporation) provides explosion-welded clad metal plates and welding services through thee business segments: Explosive Metalworking, Oilfield Products, and AMK Welding. They provide everything from clad metal plates for corrosion resistant pressure vessels to perforating explosives to heat exchangers for oil, alternative energy, aluminum production, and industrial refrigeration industries. Check out the full summary on their website.
BOOM provides services for an array of industries that all have long term demand in any economic climate. If you're long here there's no reason not to sit tight and hold through earnings as this stock will surely perform in the long term. I'm talking 15 to 20 years. However, earnings season is a little worrisome and I'm confident the worst is not over. I'd bet you could pick up some more BOOM in the single digits during the next pull back. This bear market rally will come to a hault soon enough.
BOOM pays a modest dividend currently at 1.2 percent. If you're a super long term investor don't worry timing the stock and enjoy the ride - avoid transaction fees, but if you want to play this market then take some profits off the table, wait for a pullback, and get back in sometime before the ex-dividend date of June 25, 2009. Maybe even reduce your position by half if you've done well thus far. Make sure you're back in at least by June 24 if you want in on the dividend; purchasing on the actual ex-dividend date gets you nothing... the seller will received that 1.2 percent dividend.
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