Good Evening!
You might have seen DRMC around but odds are good your mental image needs to be updated on what this ticker is actually all about.
DRMC is no longer a modest little mattress maker priced to match. Now it’s a would-be aerospace supplier chasing sky-high market opportunities . . .
. . . but as of today, shares are priced a hair above mattress levels. This is our chance to catch the new DRMC while it still trades like the old one.
Load that chart and follow along as we think about where these shares might take us tomorrow morning:
This one’s a fairly straightforward story. DRMC told us that it was going in a new direction on January 5, which is the green circle up there.
From that point, the price action drifted up and up as DRMC coughed up a few more details and traders got comfortable with the evolving story.
On the biggest spikes, DRMC traced what looks like a near-term ceiling all the way up at 0.018. Call that the top of the channel for now.
Once the “new direction” got started, DRMC rarely dipped under 0.006 again, so that’s a good candidate if you’re hunting a post-mattress floor.
As you see, DRMC is currently a lot closer to the low end of that range while it would take a mammoth move to ride back to the top.
Either way, the “new” DRMC has only been trading for 27 sessions now so I wouldn’t pay too much attention to technical lines that draw on 26 data points or more.
At best, those long trends you see up there have only been relevant to the new DRMC for the last couple of days. The rest is all mattress noise.
Add it up, we’ve got close to blue sky here once the direction changes and the cycle starts again. DRMC may be small, but flying is flying!
So why did that 0.006 sky open up for DRMC in the first place? Management was eager to play in the big leagues so they bought an aerospace supplier. (Read more)
I think this is them: NU Metals Technology. Right now it looks like they mostly sell aluminum, but stainless steel and titanium are in the mix too.
Aviation manufacturers are traditionally hungry for aluminum because it’s light . . . and new alloys build on that underlying advantage.
DRMC can step in now and sell a little aluminum to the Boeing and Airbus and Embraer type jet makers of the world, at more than $1,800 per ton.
To add a little “value” to those sheets of metal, DRMC is also opening a “computer numerical control” (CNC) component making unit. (Read more)
Know about 3-D printing? CNC works a lot like that, only on a bigger industrial scale. Customers send in designs, DRMC makes the parts. (Read more)
All the planes in the air now need fasteners and spare parts and industry gurus say 35,000 new planes are coming on the long-term horizon.
That’s a lot of metal widgets for companies like DRMC to sell. And if the overall market opportunity here is really $1B+, it might beat mattresses.
Bottom Line: DRMC made a big operational trade up about six weeks ago. Today’s share price is practically at pre-transition levels.
We really do have a chance here to play a new corporate footprint at the old DRMC’s price point. How often do I get to say that?
So ponder the possibilities tonight and I’ll touch base again on DRMC tomorrow morning.
Sincerely,
Papa Roach
