Dutton Associates Announces Investment Opinion: Dynamic Response Group Speculative Buy Rating In Initiating Coverage By Dutton Associates – 8/28/07
Dutton Associates initiates coverage of Dynamic Response Group (OTCBB:DRGP) with a Speculative Buy rating and a $.25 price target. The 20-page report by Dutton senior analyst Jon Ziegler, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, and other leading financial portals.
Dynamic Response Group, a product development and marketing company, boasts an experienced management team. Its focus is the creation, development, and distribution of innovative, unique, and patented consumer products and service solutions to a growing consumer demographic and other underserved market sectors. The Company’s strength is in its highly refined programs in selling through mass direct response advertising (DRA). Direct response advertising is perhaps more familiar to the public as infomercials; the Company’s primary marketing vehicle. It employs a unique methodology and proprietary process to develop, test, position, distribute, and slot its advertising programs to attain the desired and most cost-effective economics. To this analyst, this strength is among the most compelling in the business model. But most important is the sophistication of management’s algorithms for determining advertising investment spend. The products are extremely high-gross margin. A product has a life-span which can be easily extended. The Company is constantly testing new promotional activities that can extend the life of the product into new markets and audiences to generate more favorable response and “tail.” On the adjusted EPS basis, the shares are trading at 12.7 times our 2007 estimate and 2.8 times our 2008 estimate. The exceptional growth rate we expect for this Company, we project, the CAGR for net revenues of 62% over the next four years and for operating profit of 100% (for the three year period based on estimated 2007 results).
About Dutton Associates
Dutton Associates is one of the largest independent investment research firms in the U.S. Its 230 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $35,000 from the Company for 4 Research Reports with coverage commencing on 8/28/2007. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
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