Savvy Trades and Investments

[littlefish]

nelson, HRTH yes they have to pay I think about $6 mill to true up the pension but with the returns of 2020 I think that should put them in a better position moving forward (hopefully for years). They underfunded it IMO as they struggled thru 2017-2019.

I don't think anyone has much in the way of expectations for Q4 given the valuation but even if they take a big headline loss, the underlying operating earnings minus the one times are what to watch and I think they'll again be adjusted EPS positive and definitely EBITDA+.

You have a good point on Q4, last year they had a decent quarter due in part to their print business being a Q4 operation and may have the one time pension charge this year. But that print operation often lost money other Qs so the new CEO mostly jettisoned it in favor of a lighter footprint to help in driving out costs overall thru the year. So you may be right if one time expense puts out a headline Q4 # that scares some holders into selling. Outside that, the underlying business looks as lean as it ever has and their pipeline numbers show promise of winning new business (booked over $14 mill new biz on last CC IIRC). Throw in the pedigree of the CEO/Chairman and this to me looks like one of the easiest in awhile outside major market meltdowns.

Just think if they can do pretax op income of $0.35+ per Q when Q3 rolls around next year and one time expenses are finished. They already printed those numbers (operational adjusted) in Q3.

With a bit of organic growth (CEO mentioned potential cross sell opportunities) and more cost being driven out of their business from the business restructurings, they could consistently earn $0.50+ quarters and if lucky ramp revs significantly to bump earnings to who knows where. Also, their asset light structure is pretty CapEx light to so once they get the new big facility done and settled in, they should generate good cash (at least potentially).

Thanx for the input. All IMO only.