POST OF THE DAY
DHB Industries, Inc.
Trader or Investor?

Format for Printing

Format for printing

Request Reprints

Reuse/Reprint

By Saprophytic1
January 4, 2005

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

I wrote this note to another DHB investor earlier today. You may find it useful as well. No time to write another post, but I would just say don't confuse the excellent news with what you think a chart is telling you here.

Traders and investors have different styles. Go to smartmoney.com and pull up a graph of DHB between July and now. Consider the fact that the Roth Conference was on Sep 13-15th. The stock price did not rise from this time because of individual investors alone. When do you think the institutions bought? When would these purchases have had to been reported if bought before Sept 30th? And if they bought after Sept 30th when would the change in their positions show up on the Nasdaq site?

The institutional ownership has not changed on the Nasdaq site for months yet we know that institutions purchased after the Roth conference and that institutions have to have bought the shares that Brooks sold. When the institutional ownership becomes common knowledge the bias of the common shareholder will change. So why have so many new posters shown up and begun to knock the company recently?

The Nasdaq numbers are about to change. Compare DHB's float to TASR and AH. Project what the future split will do the CRDN's float/outstanding share numbers. DHB will be looking quite attractive. This is a no nonsense business. Mr. Brooks will do what it takes to let this company grow. On a huge contract he unloaded as many shares as he possibly could. Why? Because things are happening fast. Do you think he would have unloaded this many shares if the company had not gotten 100% of the contract? No. It is in preparation for much bigger things.

The company said previously that they would be discussing the topic of moving. I believe DHB would only consider the move if they were reasonably sure they would be approved. Nasdaq will most likely not approve with Brooks owning so much of the company. Brooks will have to sell because if he didn't, given the prior Nasdaq/SEC decision it would look like Brooks outright "won". Won't happen. I think the contract came and demand from the individual investors was there (who by the way were quite happy to buy it at that price because they knew what the contract meant). This afforded Brooks the opportunity to satisfy either what was or what they thought was going to be a precondition for listing. All speculation on my part.

If Brooks sells down can Nasdaq deny him on the basis of share price? On the basis of business model? On the basis of too much ownership?

Individual investors have always been able to affect this stock about 25%. So where does that put us? It is funny how a few down days causes chartists to negate news that has surely happened. The contract is still there but it has sort of been made to disappear hasn't it? It is an interesting phenomenon. It is also why those with a true longs heart are not fazed by the pressure. Nothing can change what they already know.

The dollar cost averager and long is a threat to the trader and the short. Those who trade and make money, so be it. Everyone picks their poison. Buy-sell-buy or buy-and-hold. Fewer people than it seems will end up walking totally away from DHB when it is all said and done. The grass is always greener...but few are as green as this company with multi-million dollar contracts. How many days left do the hedges have until the institutional ownership figures change?

Do not sell yourself short. You are great at investing. You may not be so good at trading. So what? Big deal. If you can make money by investing in a company you really like then you are by all means a winner in anybody's book.

Sapro


Become a Complete Fool Join the best community on the web! Becoming a full member of the Fool Community is easy, takes just a minute, and is very inexpensive.