Hurco Companies, Inc. (NASDAQ:HURC)

Stong pitch from WBuffettJr on favorable comparability of upcoming earnings to previous year earnings (previous quarter earnings have been compared to year in which no taxes paid, and perfomrance therefore looked worse). Ideally buy in high 20s.

I've owned this cyclical stock before and done well, but was particularly impressed with WBuffettJr's writeup in TMF's Liquid Lounge (here at: http://boards.fool.com/Message.asp?mid=25131884&sort=whole&source=ihtfoceml728000).

I'd forgotten about this stock after I sold it in Feb.2006. Thanks to WBuffettJr's detailed work, I'm going back into it with real money! (but only for the short-term; 1 year or less). Wish me luck...

Also, I respect Richard Moroney's work and his Quadrix stock-rating system (read his short blurb/writeup here:
http://www.forbes.com/2007/01/11/cashflow-ceradyne-hurco-pf-guru-in_rm_0111soapbox_inl.html?partner=yahootix
for details).

Normally cyclical and investors are waiting for the downturn. This company handled the last downturn well and now is expanding into southeast asia/indochina lots of historical comparisons to boom times of previous innovation.

Pretty open and shut case here - P/E less than historical growth, good balance sheet, niche industry, strong cash generator.

Not a sexy indurstry, but a solid performer.

Screen of 5-star picks by top 80 CAPS players with >= 80% accuracy and stocks that meet:
not in the oil industry
<30 ttm P/E
<30 forward P/E
>10% Profit margin
>5% ROA
> 2 current ratio

I like this stock...but I don't know why it has such high-inventories compared to cash. I'm assuming that this might be a lot of work in progress?? Inventories seem like they've been around for a while...So I think its okay.

Very good percentages

Great niche in machine builders market segment. Small machines that work well in maintenance applications as well as production lines. Offshore competition makes it essential that US companies buy less expensive PPE to keep product costs down. HURC offers a product that helps execute this strategy. I look for an increase in US sales based on my comments above.

I am a Chief Project Manager at Volvo Powertrain who deals with the content included I shared.

flynner8

bottom feeding

great Q

underpriced on fundamentals

Cash flow looks weak. The company is keeping up investment, but the market does not seem happy. Look at the P/E of only 10

Cyclical stock. Very solid report today. Operating income 2006 up compared to 2005. Net income $2.42 per share reflecting the fact that Hurco incurred income tax expense of $7,635,000. No income tax in 2005, and net income for fiscal 2005 was $2.60 per share.

New order bookings in fiscal 2006 increased 26%, over the prior year. Unit orders increased by 33% in the United States, 29% in Europe and 68% in Asia. New order bookings for the fourth quarter of fiscal 2006 up 23% over the corresponding 2005. Gross margin for fiscal 2006 was 35.9% compared to 33.9% for the prior year.
Cash and cash equivalents totaled $29,846,000 at October 31, 2006 compared to $17,559,000 at October 31, 2005 and $24,504,000 at the third quarter ending July 31, 2006.

Closed at $26.05 on 12.06.06, PE 9.24

12/6/2006 4th quarter earnings were released after market close ($26.05 closing price)

* Record q4 '06 sales of $43,164,000, record annual sales of $148,517,000 and increase of 24% and 18 % respectively.
* Record Operating income for q4 '06 ($6,515,000) and for all of '06 ($22,628,000)
* Net income for fourth quarter of fiscal 2006 was $4,714,000, or $.74 per share compared to net income of $7,235,000, or $1.13 per share.
*Net income for fiscal 2006 was $15,479,000, or $2.42 per share reflecting the fact that Hurco was fully taxable in 2006 and incurred income tax expense of $7,635,000
This compared to $2.60 per share when they paid $0 in income tax in '05
* New order bookings increased 26%, Unit orders increased 33%
* Gross margins increased from 33.9% to 35.9%
* $4.04 net cash per share

Based new TTM earnings of $2.43 trading ranges would be $19.83 - 24.56. I see this as unlikely since the TTM EPS reduction was due to the tax situation in "05
The company is operating with record results. I look for a PE expansion this coming year.

10/1/06
Hurco is considered to operate in the cyclical machine tool industry.
They had large tax loss carry forwards in 2005 which artificially increased net income. Despite these difficult comps they have continued to increase net income.

Posotioning themselves to take advantage of growth opportunities in international market.

Good 2-year pick. Manufacturing is on the up swing with Aircraft, Defense and Medical doing well. Hurco has a competitive edge over the competition with an easy to use control. Great for manufacturing productivity. Get the job and ship the finished goods in less than 1 week. This reduces manufactures WIP (work in process).
I sell the machines and own the stock. 2006 sales are very strong.

Deep, bloody value um....maybe. Currently priced as if there will be no growth ever....but revenues are up 16% YOY. That's NOT reflected. It's at fair value assuming zero growth. Great stock. Nice hedge against the dollar, too--since as the dollar falls, and Really Smart Folks tell me it's going to, this company is going to sell more machines and controllers overseas.

Fundamentals are solid and the stock is trading at a low p/e