Ducommun: The Market Overadjusted To Real Risks And Underestimates Tangible Book Value
- Ducommun share price is held back by its significant interest payments only covered 1.4 times by EBIT.
- Customer risk is concentrated at a few firms only and the government.
- The company trades at a significant discount to the average EV/EBITDA ratio of competitors.
- As the oldest company in California it carries some undervalued real estate worth 20% of enterprise value on its books.
- The company is an interesting acquisition target but could also work of its debt load by continuing business as usual.