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Hammond Manufacturing Company Ltd T.HMM.A

Alternate Symbol(s):  HMFAF

Hammond Manufacturing Company Limited is a Canada-based company, which is involved in the design, manufacture, and sale of electrical and electronic components. The Company manufactures a range of products for the electronic and electrical products industry, including metallic and non-metallic enclosures, racks, small cases, outlet strips, surge suppressors and electronic transformers. Its primary products include electrical and electronic enclosures, racks and cabinets, power bars, and electronic (low voltage) transformers. The Company and its subsidiaries operate in Canada, the United States, the United Kingdom and Australia and Taiwan. Its products include Mild Steel Enclosures (Type 12, 4), Stainless Steel Enclosures (Type 4X), Aluminum Enclosures (Type 4X), Disconnect Enclosures, Modular Freestanding Enclosures, Operator Interface Enclosures, Wireway & Trough, Commercial Enclosures, Rack Accessories, General Accessories, Low Voltage or High Voltage Tube plate, and others.


TSX:HMM.A - Post by User

Comment by babybunnyon Mar 22, 2021 6:52pm
153 Views
Post# 32855340

RE:RE:Value and momentum

RE:RE:Value and momentumGood explanation of some factors that have traditionally caused HMM.A to trade for a fraction of its intrinsic value.  

Keep in mind, if the company keeps up its strong earnings, book value and intrinsic value will continue growing at a nice clip.  So investors will reap a good return, even if the stock keeps trading at the same fraction of intrinsic value.

However, it would not take unexpected news to make the stock really pop.  If earnings remain strong for another quarter or two, the stock may be re-rated, and may finally catch up to and surpass book value.  This is by no means assured, but nor is it a big stretch.  Should such a re-rating happen, then as the share price moved north of $5 on the way to book value, some of the other factors you discuss such as liquidity, marginability, and analyst coverage might finally change.

One other factor you do not mention is that many of Hammond's long-tern shareholders have a basis in the $2 range, and with the share price stagnant over recent years while the company has performed well, they have had no motivation to sell.  If the share price should climb above $5, some of these long-tern shareholders would be obliged to trim their holdings in order to maintain an appropriate stock weighting in their portfolios.  This prying of hands would finally bring some shares to market and help solve the liquidity problem. 

These are just my musings and conjectures, and not investment advice.  Please do your own due diligence.


 
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