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HIL - Hills Limited

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B

Brengun

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This is a long established company which seems a little down on shareprice lately. Briefly looking at it history it seems to have a steady compounded growth of around 15%. I suppose higher metal prices and a high $Au isn't helping.
Does anyone hold these stocks? Is it just a good steady plodder for a portfolio?
 
Re: HIL - Hills Industries

Hi B,
Todays drop in the SP of HIL is small relative to the market average. In the mid-august correction it also did not drop much. HIL has been in a general downtrend since it went XD on 3rd Sept. It seems likely it will drop further in the near future, even if the market as a whole does not. It has a good yield so you are probably right in thinking it is a good portfolio stock.
 
Re: HIL - Hills Industries

have been looking at Hills for a while now, have been dropping steadily from $3 in January to a close of $1.275 on friday (this was after the 11% rise from it's 12 month lows)

Hills employ a 100% payout ratio which makes them very attractive when the economy is going well, but probably less attractive in the current economic climate.

They have a conservative gearing ratio of 47.9% (as at december 08) and their diversified product line creates less risk of a single product becoming less popular.

Does anyone have any other views on Hills for a long-term hold prospect?

Appreciate any thoughts

Bloomy
 
Re: HIL - Hills Industries

I've just been reading an article on HIL in AIR magazine which talks about profit improving. Price has responded to a recent release and was curious as to what the future view is from the fundamentals?
 
Re: HIL - Hills Holdings

Today a profit warning sent the shares down 12%. Now sitting very dangerously at support ~$1.90. Hard to imagine that to hold over next week.

The profit warning probably wasn't a surprise imo. HIL has underperformed the sector in the last month or so before spiking back up to $2.15. Many building products company have issued warnings (HST, ABC...) so they simply cannot be immuned.

Surprisingly the share opened at $2.08. Making it the easiest short trade of the year... same thing happened when DOW had that big downgrade. It's like there was not enough people watching the open?!

The market is such a funny place sometimes.
 

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Re: HIL - Hills Holdings

Well the price has gone up over 21% in the past couple of days. Obviously not a favourite here given that the last posting was in October last year.........

Hopefully Trillionaire is still in the stock....
 
Re: HIL - Hills Holdings

piggybank said:
Well the price has gone up over 21% in the past couple of days. Obviously not a favourite here given that the last posting was in October last year.........
Click to expand...

Change in direction after selling off their steel business a while back attracted my interest. Last 2 days were positive after announcing acquisitions with a break from pattern so far today.

Yesterday's chart.

hil 4 Sep 13.gif
 
Re: HIL - Hills Holdings

Country Lad said:
Change in direction after selling off their steel business a while back attracted my interest. Last 2 days were positive after announcing acquisitions with a break from pattern so far today.

Yesterday's chart.
Click to expand...

A phenomenal run... that's what a re-rating looks like I guess.

The trigger was 4 July announcement about profit outlook confirmation (it was ~$1 then), and the trend further built on announcements in asset sales and the profit report. I remember reading the original annoucement in July and brushed it aside as it didn't seem to contain anything too new or exciting. Back in Oct 2012 a profit warning announcement (which took profits down to the level they re-affirmed in July 2013) saw the stock plunge ~50% to 60c.

But as in most stocks related to the long-overdue buildings recovery - the market likes to focus on the future...
 
Buy-Back underway.
Will it support the sp enough to play out a double bottom?

View attachment 58278

I haven't promoted it to my shopping list just yet, but a break above $1.64 could sway me.
 
Just doing a bit of basic research and came across this one... Paying a 2c FF dividend but chart looks tragic....
 
Muschu said:
Just doing a bit of basic research and came across this one... Paying a 2c FF dividend but chart looks tragic....
Click to expand...

Dividend cannot hold, but reckon this is a super contrarian trade, they have cash flow and low debt and some issues...my latest super fund disaster as i was in way too early. :banghead:
 
So_Cynical said:
Dividend cannot hold, but reckon this is a super contrarian trade, they have cash flow and low debt and some issues...my latest super fund disaster as i was in way too early. :banghead:
Click to expand...

How reliable is that cash flow. I remember when Pretty was selling off the farm looking at these guys and thinking he was putting them into some really marginal businesses (TV's in nursing homes etc). I struggle to think there is that much money in reselling av/security equipment. Maybe I'm missing something.
 
McLovin said:
How reliable is that cash flow. I remember when Pretty was selling off the farm looking at these guys and thinking he was putting them into some really marginal businesses (TV's in nursing homes etc). I struggle to think there is that much money in reselling av/security equipment. Maybe I'm missing something.
Click to expand...

Many years ago I had them in my head as a niche manufacturer somewhat related to the buildings supply game... they then tried to reposition themselves as a health tech company (why?) and then god knows what they do now.

It's probably a good business management case study on how to shrink to crap-ness.
 
skc said:
Many years ago I had them in my head as a niche manufacturer somewhat related to the buildings supply game... they then tried to reposition themselves as a health tech company (why?) and then god knows what they do now.

It's probably a good business management case study on how to shrink to crap-ness.
Click to expand...

I've looked at them a few times and been pretty unimpressed. I don't think they know what they do themselves sometimes. looking at them again I do like the fact their corporate headcount is dropping. They need to get smaller, act more like a consultant and charge fees. There is not much money or margin in security and AV.
 
McLovin said:
How reliable is that cash flow.
Click to expand...
Speaking of "cash flow" (or "what cash flow?").

I love the investor presentation.

"Excluding the restructure provisions payments, net cash flow generated by operating activities would have been $8.1 million in 1HFY16...."

Yet, they completely ignore the decrease in trade working capital of $8.4m which is most likely much more to do with the fact that their business is rapidly shrinking (WC run-off isn't really operating cash flow because it's unsustainable). They claim (pg. 19) that $3.1m of this is because of "improvement in collections performance." Sounds like management speak. Businesses can improve their cash life-cycle, but when revenue is falling at the same time it's much harder to prove it.

I notice they're still restructuring at least into the 2017 year (note $2m cash flow impact). This stuff doesn't stick to the bones of companies without a competitive advantage. Short term efficiency gains just get eaten up by competitors who do, or have done, the exact same thing.

Sure, this thing could speculatively triple, quadruple, go to zero, whatever, but there's very little actual evidence on which to base any sort of investment case.

I guess it could be an "asset play" but what if the share price triggers another asset impairment evaluation? (LOL) :rolleyes:
 

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