Hollysys Finds Its Future In Its Past, But Investability Is A Real Question

 

I should have known better than to think anything with Hollysys Automation Technologies (HOLI) would be simple or straightforward.

When I last wrote about this Chinese manufacturer of process automation and rail control systems, I said that with a solid $23/share offer in hand from an investor group on good terms with the board, a buyout at an attractive price for shareholders looked far more likely.

I couldn’t have been more wrong. In a series of events that included bringing back the original CEO (and a member of that $23/share bidding group), the company has instead decided to stay independent and eschew further evaluation or consideration of go-private bids. They also, finally, posted results for the quarter ended on June 30, 2021 … in mid-February.

As for me, I’m done with this stock for the time being. Maybe things will settle down and return to a more acceptable level of communication and reporting with the management changes, but between an auditor change, generally poor communication with investors, and a lot of operational uncertainties, I don’t see the need to bother with this one. Yes, the shares could perhaps be substantially undervalued, but I’d rather earn less money with a lot less hassle elsewhere.

 

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Hollysys Finds Its Future In Its Past, But Investability Is A Real Question