Tuesday, January 10, 2017

Hurco Doing A Little Better

I can't really complain about the post-election performance of Hurco (NASDAQ:HURC), as this small manufacturer of machine tools has seen its shares rise almost a third since the election. That's not out of line with what many smaller industrial-focused names have seen, as fellow machine tool company Hardinge (NASDAQ:HDNG) is up close to 30% since that time and welding equipment manufacturer Lincoln Electric (NASDAQ:LECO) is up more than 20% while the much larger (and less U.S.-focused) DMG Mori (OTCPK:MRSKY) is up around 15%.

I believe Hurco can still look forward to stronger economic conditions in both the U.S. and Germany, and the company should start to see even more benefits from its 2015 acquisitions of Milltronics and Takumi now that it has used a recent industry trade show to reintroduce and relaunch the brands. I'm not expecting Hurco to get back to the pre-2008 experience of gross margins in the mid-to-high 30%'s and operating margins in the mid teens, but I do expect the company to modestly outgrow its sector and generate solid consistent performance, supporting a fair value closer to $40 today.

Read the full article here:
Hurco Doing A Little Better

No comments: