Middle Coast Investing, an investment advisor firm, released its third-quarter investor letter. A copy of the letter can be downloaded here. It was a frustrating quarter for the firm. The portfolio appreciated in the quarter but lagged the main indices and closer benchmarks. The portfolio’s price to earnings for the trailing 12 months (TTM) was 19.7. Cash and equivalents accounted for 17.1% of the portfolio at the end of the quarter, with an estimated average yield of 3%. This compares to 13.4% of the portfolio and a 3.9% yield at the end of Q2. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Middle Coast Investing highlighted stocks like DMC Global Inc. (NASDAQ:BOOM) in the third quarter 2024 investor letter. DMC Global Inc. (NASDAQ:BOOM) offers a suite of engineered products and various solutions for the construction, energy, industrial processing, and transportation markets. The one-month return of DMC Global Inc. (NASDAQ:BOOM) was 27.79%, and its shares lost 39.02% of their value over the last 52 weeks. On October 7, 2024, DMC Global Inc. (NASDAQ:BOOM) stock closed at $13.75 per share with a market capitalization of $275.534 million.
Middle Coast Investing stated the following regarding DMC Global Inc. (NASDAQ:BOOM) in its Q3 2024 investor letter:
“DMC Global Inc. (NASDAQ:BOOM) – This is a special situation, similar to Vimeo in Q1. There is an offer on the table to buy DMC Global at $16.5/share. It looks credible, but DMC and its buyer – a billionaire – have not talked with each other.
DMC Global is an industrial business with three units – Arcadia, a building products company similar to Apogee but smaller, not as strongly performing, and west coast based; DynaEnergetics, DMC’s original business, which offers ‘perforation’ services to oil companies (meaning dynamite to blow up land for fracking and other oil drilling); and NobelClad, which sells heat-resistant metals to a variety of businesses.
This is not the sort of business I’d normally own. But the offer is credible, and BOOM was already undergoing a strategic review, which can mean a sales process. There are some other weird notes around management here. The stock isn’t terrible to own at its 52-week low of $10.5 (we bought shares at $13). Our worst case is if DMC sells off its oil-oriented businesses at a low price to focus on Arcadia, and that’s what I’m watching out for.”
An aerial view of an energy refinery, with massive tanks and piping defining the landscape.
DMC Global Inc. (NASDAQ:BOOM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held DMC Global Inc. (NASDAQ:BOOM) at the end of the second quarter which was 16 in the previous quarter. DMC Global Inc. (NASDAQ:BOOM) reported $171.2 million in sales in the second quarter up 3% sequentially and down 9% from Q2 2023. While we acknowledge the potential of DMC Global Inc. (NASDAQ:BOOM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed DMC Global Inc. (NASDAQ:BOOM) and shared the list of best oilfield services stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.