It’s been tough to be a Hollysys (HOLI) investor, as the company’s promising industrial automation and transportation automation (automation systems for high-speed rail and subways) has been undermined at times by incompetent management, inconsistent shareholder communication, weak liquidity/analyst coverage, and more general macro factors like competition and the pandemic.
Oh, and there’s been a dust-up with a former CEO who has been trying to advance a low-ball offer to take the company private.
At long last, though, there could be some light at the end of this tunnel. Hollysys management has received a credible offer from its founder (and former chairman and CEO) that values the company much more appropriately, and the company hasn’t swatted it down. Given that the company is actually overdue with fiscal Q4 earnings, that may be a signal that there’s been serious discussion about the bid, but that’s speculation on my part.
I’ve always said I saw real potential in the business and that it was undervalued. With a bid on the table that’s close to my estimated fair value and good underlying performance in the Industrial Automation business, it’s easier to be more bullish on this name.
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Hollysys Investors Seeing A Light At The End Of The Tunnel... And It's Not An Oncoming Train
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