Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi, DGL is a small-cap chemical business, majority ownership is with the owner, which is good and bad, both. The business as such is performing well, the cash position is good, the valuation is reasonable, and the stock has come down quite a bit. I bought some at $1.80 and am keen to buy more around $1.40. You reckon it a good stock to own, with growth potential. Regards, Vinod
Hi Vinod,
As a rule we definitely like management to hold a major equity position in a business i.e. when people have “skin in the game” they should by definition always act in the best interest of the company but unfortunately this is still no guarantee of success.
In terms of DGL we have been asked on a number of occasions what we thought while the shares slowly slipped from over $4.40 to under $1.50, from our perspective this a classic example of “don’t fight the tape”, before we consider DGL we will need to see a catalyst that indicates the business will experience sustained earnings growth.
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