Hammond Power Solutions Inc T.HPS.A

Way undervalued right now

[LyChauncey]

5.8 are you kidding me. TTM EV/EBITDA of 3. Blood on the street? I would say it is at the very least a 12 dollars stock.

[albertan33]

I agree, seeming quite cheap here. I would think with the green movement coming more transformers will be needed. I have started pciking away at a position here, only problem here is the trend doesnt seem to be your friend. I dont understand why the share price just keeps slipping down. For now the dividend looks safe, balance sheet is great, its in a good space. Buy and hold.

[LyChauncey]

Right. Too many weak hands right now or there is something big that we didn't see. Wish someone here could explain to me what the sellers are thinking. Dividend is definitely safe. 5.9% dividend yield at 26% payout ratio. I have never seen anything like this.

[Java7]

Been in and out of this thinly traded stock, the company looks to be positioned for an electrical world and the Divy is really sweet while we wait.  java7

[mrmoribund]

While HPS-A does indeed look very cheap on paper, you want to be mindful of two issues. First, the rise of environmentally-friendlier transformer fluids. If you do a search for this you'll see, among other things, that Cargill now offers a transformer oil that is based on vegetable sources. If this catches on it will not be good for HPS, which is committed to the dry transformer (though it

[LyChauncey]

Thank you so much for your input. I will look into how impactful envrionemntal-friendly transformer fluid to Hammond Power's business. Regarding to the second concerns, I saw Hammond(William G) owns 3.54% together with insiders own 13.35% of the company while institutions own 40.72%.. Not sure how Hammond family could control a company without owning a lot of shares.  Chauncey

[mrmoribund]

Regarding control of the company, you need to look at pages 10-12 of the most recent Management Information Circular. Here are the key passages: The Corporation has authorized capital of an unlimited number of Class A Subordinate Voting Shares and an unlimited number of Class B Common Shares, each without par value. As at the date hereof there were issued and outstanding 8

[LyChauncey]

This is clear now. Thank you so much! So Hammond will receive 1.1 millions dividend each year from HPS. Seems like they might not be very motivated to boost the stock price anytime soon. Hammond is still buying small amount of A shares on public market from time to time. On the plus side the family owns 30% of the company, I am actually happy that the CEO owns so much shares along with the

[mrmoribund]

Well that's right. The family (single person, actually) control is not entirely bad. There's no doubt that Hammond's financial interests are well-aligned with those of shareholders. A very different kind of problem is where insiders don't own any shares at all. It may be that Hammond is absolutely the best person, in terms of ability, to be running the company. I wouldn't

[Paddy902]

Hoping his feelings direct him take it private at $12 a share to avoid further embarrassment!!

[Java7]

I'd be happy with 12.00, it's undervalued, pays a divy and volume while still low is up a lot on average them. Maybe it's the electrical revolution creating some interest.  java7

[Paddy902]

Certainly a good week regardless of why.