Hawkins, Inc. (NASDAQ:HWKN)

CAPS Rating: 3 out of 5

The Company's principal business is the distribution, blending, and formulation of bulk and chemicals, which it conducts in three principal segments: Water Treatment, Industrial and Pharmaceutical.

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Member Avatar youngrealmoney (< 20) Submitted: 7/29/2014 2:52:11 PM : Outperform Start Price: $34.80 HWKN Score: +13.55

bought 14 shares at 35.39

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Member Avatar GunnarVagotis (96.92) Submitted: 2/3/2011 2:49:06 PM : Outperform Start Price: $35.90 HWKN Score: -43.29

Small cap chemical company that is weathering a beat-down. This may not be your entry point, but it should go in your watchlist.

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Member Avatar Maribaza (95.31) Submitted: 1/27/2011 4:05:57 PM : Outperform Start Price: $36.21 HWKN Score: -44.87

Caps- Most Down

Personal scoring-68 71 66

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Member Avatar Adler6 (< 20) Submitted: 4/29/2010 2:32:12 PM : Outperform Start Price: $25.44 HWKN Score: -10.64

Steady growth and return on equity. A winner for the long haul.

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Member Avatar greenwave3 (< 20) Submitted: 3/22/2010 8:59:17 PM : Outperform Start Price: $21.61 HWKN Score: +13.31

A winner. Just ask the shorts.

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Member Avatar schmidmj (< 20) Submitted: 11/21/2009 2:41:51 PM : Outperform Start Price: $19.59 HWKN Score: +23.28

No Debt, stable growth

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Member Avatar rknapton (< 20) Submitted: 11/14/2009 5:52:16 PM : Outperform Start Price: $19.76 HWKN Score: +20.88

HWKN (Hawkins Inc.)
This Minneapolis based chemicals company has been in business since 1938, and has two segments of Industrial (65% of sales) and Water Treatment (35% of sales). As you could predict, the Industrial segment was down, and off by 23% last quarter, hit by the recession, but the Water Treatment segment (apparently if you live in the Midwest you've drunk water treated by their chemicals) was stable as it declined by less than 5% in sales.

So basically you have a small, but stable, long term slow growth company, and it is trading at an attractive valuation of just 9 times trailing earnings and 10 times forward estimates. They also have a cash hoard of $37 million built up, along with no debt, making the company a further bargain yet. The stock pays out a 2.5% dividend, which is not in jeopardy at all considering it is a small fraction of their earnings. A ten year chart is interesting to look at to see how slow and steady the stock has been up until this year. Since it has had a large rally this year, I'm just going to keep it on my radar screen and purchase only if the stock pulls back in a bit, even though fundamentally it does still seem priced attractively.

RK

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Member Avatar wofaintagain (20.51) Submitted: 11/5/2009 5:17:07 PM : Underperform Start Price: $19.72 HWKN Score: -14.05

good company but overvalued so far

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Member Avatar paulgato77 (< 20) Submitted: 10/29/2009 1:22:41 AM : Underperform Start Price: $20.18 HWKN Score: -7.42

Their procurement strategy enabled hawkins to sell their products at high levels of profitability. Using LIFO inventory adjustements, they posted record profits from a decrease in inventory costs. I've noticed that this tends to be a normal part of doing business for Hawkins since, essentially, they are selling commodity based products. The fun's over for now. The CEO did mention raw material prices are softening in the near term, which will drive down profit margins. Their water treatment chemicals may also have softer demand because were comming off peak usage. They are invovled in other industries which are not cyclical by nature, which will offset decreases in other areas. Long term, I'm very bullish on this company. The intrinsic value of the company has steadily increased. They have a history of generating a decent return on shareholder's equity. They've made smart aquisitions, and are expanding their facilities. They're also focusing on higher margin specialty chemicals. In my view, the company's intrinsic value may have grown in line, or just shy of its market value. Long term, the company has favorable economics and will continue to grow its intrinsic value above its peers.

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Member Avatar lollard (99.68) Submitted: 10/9/2009 12:32:12 PM : Outperform Start Price: $18.39 HWKN Score: +16.45

Hawkins has recently shown up in the holdings of value gurus, and it's easy to see why. The company is small and boring. It has a good balance sheet, management is aligned with shareholders' interests, and there is reliable demand for the company's products. Under ten times trailing earnings, the price gives value investors a good margin of safety, while the healthy dividend only sweetens the deal.

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Member Avatar dan36god (96.36) Submitted: 9/24/2009 5:57:58 PM : Outperform Start Price: $21.75 HWKN Score: -7.99

Fantastic fundamentals, growing, also seems under the radar.

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Member Avatar wooderino (88.63) Submitted: 9/22/2009 2:15:41 PM : Outperform Start Price: $22.22 HWKN Score: -7.73

small-cap with strong 5 year ROE& profit margin improvement

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Member Avatar DaveZzzz3 (< 20) Submitted: 9/14/2009 6:20:57 PM : Outperform Start Price: $22.43 HWKN Score: -13.37

Found this one with a NASDAQ Guru search. Consensus agreement among 3 gurus only picks a handful of stocks, and this was one of them.

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Member Avatar dantefromsomm (< 20) Submitted: 9/7/2009 5:41:00 PM : Outperform Start Price: $18.42 HWKN Score: +21.66

basics, good income statement and balance sheet,goodp/e

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Member Avatar 5SsmallcapDIV (77.53) Submitted: 9/2/2009 3:53:48 PM : Outperform Start Price: $17.95 HWKN Score: +21.73

5 Star, Small Cap- pays dividend

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Member Avatar viasyncro (< 20) Submitted: 6/26/2009 11:30:55 AM : Outperform Start Price: $19.51 HWKN Score: -15.72

Water Treatment Solutions

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Member Avatar rd80 (96.90) Submitted: 6/13/2009 6:39:25 PM : Outperform Start Price: $18.23 HWKN Score: -1.47

HWKN is a chemical company serving customers in water treatment, the industrial sector and, until recently, pharmaceutical companies. In late May, HWKN announced it was discontinuing retail pharmaceutical operations. That division only accounted for 2.8% of sales and had been operating at a loss. HWKN will continue to sell bulk chemicals to pharmaceutical companies through its industrial division.

There are two remaining operating divisions – industrial and water treatment. Industrial sales contributed $201 million to total revenue and water treatment contributed $82.8 million. Both segments grew revenue substantially through a combination of higher prices (they were able to pass higher commodity prices through) and volume growth.

On 4 June, HWKN reported 4th quarter and FY 2009 results. Results were very strong compared to year-ago results, but quarterly results fell four cents short of the analyst’s 54 cent estimate. FY2009 sales were $284.4 million compared to $186.7 million in FY2008. Full year FY2009 earnings were $2.32 per share compared to $0.89 in FY2008.

HWKN has new manufacturing facilities in Illinois and Minnesota that are expected to be operating by mid-summer. CEO John Hawkins stated, “We believe that this additional capacity will aid us in better serving our customers in these markets and provide us with the opportunity to grow our market share.”

The balance sheet is a thing of beauty. $29.5 million in cash with zero debt. I believe no debt is a huge advantage for companies right now. There’s no need to rely on uncertain credit markets and the company is in a position to either acquire or expand market share while competitors are struggling to survive.

HWKN also sits in a good place with market cap. It isn’t currently shown as a member of any major indices, but at a little over $200 million it should be knocking on the door of the Russell 2000. If it were to join the Russell 2000, it would pick up some institutional buying from ETFs and index mutual funds.

Strong growth during a recession for both segments should turn into outstanding growth when the economy stabilizes. The water treatment segment should offer a great combination of demand that isn’t dependent on economic conditions with demand growth due to population growth. All that and you get paid to hold the stock.

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Member Avatar bigolelabtech (48.49) Submitted: 5/12/2009 8:16:20 AM : Outperform Start Price: $15.65 HWKN Score: +34.85

This stock will hit the roof by fall. How do I know? Because I meditate, and when you meditate, theres no limit to what you can imagine. I see a twenty point rise over the next quarter followed by pooh.

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Member Avatar kaptnkrk (< 20) Submitted: 5/5/2009 1:25:52 PM : Outperform Start Price: $15.33 HWKN Score: +36.46

Water Treatment, Industrial and Pharmaceutical. What more can you say the future depends on this I can see gains all the way.

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Member Avatar jdaley456 (< 20) Submitted: 4/21/2009 11:52:02 PM : Outperform Start Price: $14.00 HWKN Score: +45.87

Energy will help get the economy back in gear again in many ways!

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