From the same people who brought you Bombardier, HCG, Valeant and Concordia, here comes DH Corp, the latest worthless company to hit the news big.
Much like Valeant, DH Corp is a solid company with great asset, a long track record and fantastic return – that is, until they started crashing and nothing could save them.
Does it make sense that a company operating in a service industry crash 40% in one day? No, but much like Valeant, it doesn’t matter! Welcome to the lotto stock market, where numbers don’t matter and every stock can be manipulated
DH Corp earnings
Yesterday, this company reported earnings that were slightly below average – emphasis on “slightly.” You’d expect a 3-4% pullback at most, but given that this turd is a Canadian company, then of course it’s going to 0 (See: Valeant).
And don’t count on the dividend neither! Although it is now 7.9% and well-covered by free cash flow (less than a 25% payout rate), you can bet this dividend is going to be slashed for some reason. Because that’s what the canadian stock market is – a gigantic stock market where a company can crash 40% overnight because it reported a 0.2% reduction in revenue (from $418.8M to $418.4M). Doesn’t make sense? It doesn’t matter – that will teach you to trust in Canada’s management.
Is it time to buy DH Corp? On paper, it’s a clear yes, but given that this is a canadian stock, it’s a big no-no. At this point, expect them to announce a $2 billion “charge” out of nowhere. Much like Valeant, this one smells like death to me, even tho, once again, on paper, everything is okay.
The Canadian stock market is a huge pile of garbage. Apart from some very select REITs and utitilies, there isn’t a single decent company listed on that market. Why? Because much like DH Corp, they can crash 50% overnight for little to no reason.
Don’t buy canadian stocks.