Hurco Companies, Inc. (NASDAQ:HURC)

TMFPlatoish (99.19) Submitted: 10/15/2006 12:55:25 PM : Start Price: $26.18 HURC Score: -26.48

This is a very small company in a boring (or at least out of the public eye) industry. They are a technology company however and supply the machine tool industry with a strong line of innovative products. They haven't really been discovered by Wall Street yet because of their size. My feeling is that will change as they grow and become recognized, and with it will come an expanded multiple, more in line with the larger players in the industry and in recognition of their solid growth and profitability metrics. They are expanding rapidly in Asia and have made it a priority. They have produced a string of well-received new product offerings that have allowed them to expand their market. My feeling is that the global expansion should partially mitigate the perception that they are a cyclical tied closely to the health of the manufacturing sector. This should also boost the multiple the market is willing to pay. They have been a double for me over the last 18 months and I think they still have room to go. They still sport a trailing P/E of less than 10 and are continuing to show growth. They have used up their NOL tax breaks and earnings comparisons are deceiving if you don't dive deep enough into the numbers. Outperform.