Hurco Now In The Teeth Of The Downturn

The fact that Hurco (HURC) is starting to see a sharp downturn in revenue really should be no surprise; orders went negative three quarters ago, and nothing in the global manufacturing economy has really gotten better since then. At this point, there is still a great deal of uncertainty over the shape of this downturn – will this growing “sluggishness” turn into an outright recession, or is this more of a lull in an otherwise healthy trend?

I’ve been of the opinion for about six months that there was more emerging weakness than commonly expected, and I do still see some downside risk to 2020 – particularly if the trade disputes between the U.S. and China and the U.S. and EU intensify. Specific to Hurco, management has been through this before and the company is in solid financial shape. The shares are undervalued now, but I still see some downside risk, mostly to perception/sentiment, in the industrial sector over the next couple of quarters, so investors looking at this name as an undervalued rebound play need to recognize the risk that the decline isn’t over yet.

Read more:
Hurco Now In The Teeth Of The Downturn