Lester Goh
Recent high-school graduate, long-term greedy, value, special situations

Short Dycom: Perennially NPV Negative, 60% Downside To Fair Value

Dycom Industries (NYSE:DY) ("Dycom", "DY," or "the Company") has supposedly been revitalized. For much of 2005-2011, growth was anemic and profits were thus representative of a steady-state business. Suffice to say, shares of Dycom went nowhere during said period. However, near the start of the current decade, shares have been given a new lease of life, largely thanks to the ramp-up of capital spending budgets at major telecoms. This resurgence in capital investment by telecoms has led to unbridled investor euphoria with respect to Dycom, evident by shares tripling in recent years to ~2.6x EV/IC. Bulls are apparently convinced that the capital spending binge by telecoms would bestow upon Dycom newfound riches in the form of larger, sustainable, ...
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