5/9/24 - $hgbl - punting long here, risk to upside: interesting 5/9/24 - vrockstar - super weird one to write up i'll admit - but hang with me here, think this is an interesting risk reward on EPS print
1) seems like the right "fit" for bidenomics, co's getting liquidated, ppl losing biz's etc. and these guys r the specialists in this? interesting "benefactor" of the environment
2) growing 5-10% a year minimally, and consistently profitable
3) 7-8x PE seems cheap for 10-15% EPS growth
4) if ROE is perhaps in the high teens, let's just say 16 to be conservative and only 5% growth on this at a heady 12% Ke (cost of equity)... you could argue (.16-0.05)/(.12-0.05) is a 1.6x multiplier on the book value of 1.65$/shr = $2.6/shr - honestly this seems like a floor value.
5) CONCLUSION: the downside seems somewhat tempered in this boring name, perhaps it doesn't move or move much... but any beat (seasonally the last 2 years 1Q > 4Q - not implied this year?) and/or the speech probably sets up for some interest here. Also not like they don't have cash to buyback the stock too.
Punting here. Small b/c it's a tiny cap, but the setup looks interesting an off radars.
