Hawkins, Inc. (NASDAQ:HWKN)

HLChin (98.87) Submitted: 7/31/2009 1:49:06 PM : Start Price: $17.48 HWKN Score: +59.57

I am testing out Thomas Howard's idea of small, low P/E companies would outperform the market. This seems to be backed by Damodaran's data.

- I have not done any due diligence by rd80's writeup is convincing and I will take it as that.
- I have added zero debt and min 8% growth
- Dividend of 2.8% while I wait for the market to recognize this. Not too bad to have.

Plus Hawkins is such a boring name doing "boring stuff".

MJKpayday (99.69) Submitted: 7/23/2009 10:57:15 PM : Start Price: $18.00 HWKN Score: +51.40

Small boring company with consistently growing sales of chemicals for industrial and water treatment applications.

There is no debt, reasonable PB of 2/1, PE of 8, and management seems strong (needs more research here, comments welcome)

viasyncro (< 20) Submitted: 6/26/2009 11:30:55 AM : Start Price: $20.45 HWKN Score: +20.55

Water Treatment Solutions

rd80 (99.36) Submitted: 6/13/2009 6:39:25 PM : Start Price: $19.11 HWKN Score: +31.86

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.

bigolelabtech (68.69) Submitted: 5/12/2009 8:16:20 AM : Start Price: $16.40 HWKN Score: +60.65

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.

kaptnkrk (< 20) Submitted: 5/5/2009 1:25:52 PM : Start Price: $16.06 HWKN Score: +62.49

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

jdaley456 (< 20) Submitted: 4/21/2009 11:52:02 PM : Start Price: $14.68 HWKN Score: +72.23

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

elvistmf (89.73) Submitted: 4/20/2009 12:19:32 PM : Start Price: $14.82 HWKN Score: +69.63

Large book value.
No debt.
sustainable dividend.

crimfunk (75.21) Submitted: 2/27/2008 3:15:37 AM : Start Price: $13.36 HWKN Score: +153.72

supercycle

TMFMattyA (99.56) Submitted: 9/26/2007 8:56:43 AM : Start Price: $12.83 HWKN Score: +172.89

I can’t help but love companies like this. In the tradition of NEOG, ODC, and UTMD, comes HWKN, a small, Midwestern chemicals company with a growing portfolio of niche products; nice free cash flow; strong balance sheet with zero debt; an insider team with familial connections to the business and an over 20 percent ownership stake; and a record of modest, but consistent year-over-year growth. In addition to strengthening its water treatment brands, the company recently made strong inroads into the food safety business. Oh, and did I mention the nice dividend (currently over 3 percent) that they’ve paid every year for the past 23 years? Seriously, what’s not to love!?

kristm (99.75) Submitted: 7/14/2007 3:51:27 PM : Start Price: $13.99 HWKN Score: +152.15

Agree with stillwater9999. And the market for water treatment chemicals isn't exactly going away..