Tuesday, March 8, 2016

Seeking Alpha: Hurco Holding Strong In A Tough, Uncertain Market

Will the real industrial market please stand up? Looking over the various and sundry industrial company reports I've written in recent months, it's very clear that the U.S. manufacturing sector is going through a rough patch, due in large part to very weak demand stemming from the energy sector, as well as weakness in off-highway equipment and growing weakness in commercial trucks. And yet, the market's reaction seems to be "don't worry… it'll bottom soon and then get better", helped I'm sure by at least a few companies that have said exactly that.

As it pertains to Hurco (NASDAQ:HURC), a tiny manufacturer of machine tools, it's a tough environment to model, but I think the company is handling itself quite well. Machine tools will always be volatile and there are no assurances that the company's strategy of expanding into more production-oriented tools will really grow the business. Still, I believe the shares are undervalued if my predictions of mid single-digit FCF growth and 8.5% to 10.5% returns on equity prove reasonable.

Read the full article here:
Hurco Holding Strong In A Tough, Uncertain Market

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