Quick Value #305 - Dauch Corp (DCH)

Post-merger with Dowlais, Dauch Corp (DCH) is a tier 1 auto supplier trading at a low valuation of 4.5x EBITDA and 6-7x FCF. The merger diversifies the customer base away from the big three US automakers. Significant synergies of $300M are expected, which could drive earnings growth. However, the company has a history of high restructuring costs and leverage, making the free cash flow profile uncertain. The risk/return appears balanced, with a target price of $10, representing 38% upside, but with significant downside risk if synergies don't materialize or the auto cycle turns.