DNMR: The Future Of Bioplastics?
Each Wednesday from now on, we will be publishing an idea about an interesting, under-the-radar stock that we think has long term potential and deserves a little attention. This week, we are looking at DNMR.
For those who are unfamiliar, Danimer Scientific is a bioplastics producer based right here in the USA. The company went public via SPAC last year, and after an initial climb, the stock ended up giving back all of its gains as the SPAC speculative frenzy cooled. We like this story in the long term because it's a tier 1 ESG company. The problem of plastic pollution in our oceans is a gargantuan issue, which will require advances in materials sciences to combat. Danimer is right at this intersection, and they have begun to capitalize on it. Increasing sales at a quick rate, and with customers like Pepsi, Walmart, and Nestle, there's some potential here for a long term, stable cash cow. The 2 analysts that cover DNMR have a consensus Buy rating and an average price target of $48.
The valuation right now is a bit stretched, however, which causes some pause. At the current price of $15.37, DNMR has a price to sales ratio of 26 (based on Q2’21 sales and outstanding shares), which seems elevated. Nevertheless, it's something worth keeping an eye on.
For those who want more info, here's a link to the company's recent 10-K:
d1io3yog0oux5.cloudfront.net/_8084d9d52163851812fcd06b1f4f7c46/danimerscientific/news/2021-03-29_Danimer_Scientific_a_Next_Generation_Bioplastics_27.pdf
Cheers!
For those who are unfamiliar, Danimer Scientific is a bioplastics producer based right here in the USA. The company went public via SPAC last year, and after an initial climb, the stock ended up giving back all of its gains as the SPAC speculative frenzy cooled. We like this story in the long term because it's a tier 1 ESG company. The problem of plastic pollution in our oceans is a gargantuan issue, which will require advances in materials sciences to combat. Danimer is right at this intersection, and they have begun to capitalize on it. Increasing sales at a quick rate, and with customers like Pepsi, Walmart, and Nestle, there's some potential here for a long term, stable cash cow. The 2 analysts that cover DNMR have a consensus Buy rating and an average price target of $48.
The valuation right now is a bit stretched, however, which causes some pause. At the current price of $15.37, DNMR has a price to sales ratio of 26 (based on Q2’21 sales and outstanding shares), which seems elevated. Nevertheless, it's something worth keeping an eye on.
For those who want more info, here's a link to the company's recent 10-K:
d1io3yog0oux5.cloudfront.net/_8084d9d52163851812fcd06b1f4f7c46/danimerscientific/news/2021-03-29_Danimer_Scientific_a_Next_Generation_Bioplastics_27.pdf
Cheers!
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