Scathing take on DHB Industries (DHB) this weekend courtesy of the New York Times.
On Sunday, The Times unearthed some of the struggling bullet proof vest supplier's recent woes.
Vests and body armor were as hot as a pistol in 2003 when the Iraqi occupation got underway.
It was a perfect storm: the exigencies of the war coupled with a supply shortage.
Smaller, nimbler players like Ceradyne (CRDN) and Armor Holdings (AH) made a killing.
The Times thinks another ramp up in vest production may be underway, specifically one that could turn DHB into "beehive of production."
A recent recall of vests abroad means a mammoth need will have to be taken care of.
DHB could pop -- but we'd be wary of the hype.
It's CEO has turned the company into a personal ATM machine; CEO Dave Brooks recently sold close to $200M worth of stock weeks before both a product recall and a $60 million charge were disclosed. In 2004, DHB did $350M in revenues, but Brooks took home almost 1/4 that much (roughly $80M in compensation).
It gets better: DHB has major issues with quality control. DHB's auditors quit often. And when he was 37, Brooks was barred from the securities industry for colluding with a Morgan Stanley analyst on insider trades.
It's no accident Brooks works in a "protection" industry -- from what we see, he's sure mastered his metier -- not protecting lives, but his own ass.
This stock's not for us.
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