Yesterday, The Bowser Report issued a daily mover alert on DLH Holdings Corp. (DLHC), which gained more than eight percent for the day.
DLHC popped on news of an acquisition today. There was heavy accumulation that pushed it up to a 52-week high on high relative volume. Here are some details on the acquisition from the press release:
- Highly Strategic Combination Creates Unique Provider of Technology-Enabled Solutions to the Federal Government
- Financially Transformative and Expected to be Immediately Accretive to Earnings and Cash Flow
- Pro Forma for the Acquisition, Calendar Year 2015 Revenue and Adjusted EBITDA of Over $100 Million and $10 Million, Respectively, and Total Backlog in Excess of $300 Million
- Purchase Price of $38.75 Million: $36.25 Million Cash, $2.5 Million Restricted Stock
Although the stock didn’t gain 10% for the day, we still felt the need to send this out to Bowser subscribers as it is still of importance.
DLHC currently has a Bowser Rating of 10, which has not changed recently. The company does not get a point for book value when it comes to the Bowser Rating System, but it’s effort to expand is noteworthy and should drive the stock price higher. Although this offsets it’s market to book ratio, it still provides incentive for new investors. The stock is out of our ideal sub-$3 buy zone, but has more upside now that it is hitting new 52-week highs with accumulation. Resistance levels from a technical standpoint are currently at $4.30 and $4.49 so keep a close eye out for it to hold above those price points.
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