Replies to post #162865 on Hannover House Inc (HHSE)

[pba]

But you gotta love the PROFITS!

[Michael Anderson]

I understand how margins work, but how their revenues come in, HH specifically, I wouldnt expect them to be the same quarter to quarter. Especially since they do not have a ton of streams of revenue, one project, one way or the other, can have significant impact on costs compared to another stream of revenue. Its not unrealistic for say, one project to gross 10% and another 30%. The business they are in and where they are at as a business, its just not realistic to expect margins to be consistent.

[stills999]

Margins tend to mean-revert over time, so this is really bullish!

Below is some links to the concern over the opposite scenario ... that too high of margins are difficult to sustain. We have the opposite case!

http://dumbmoney.tumblr.com/post/45917121508/profit-margin-mean-reversion-doesnt-mean-lower

Keep in mind HHSE is not like some assembly line that efficiency is gained by squeezing more out of workers ... it's a very dynamic business with different channels, each movie has a different popularity level, etc, so it would be kind of dumb not to expect margin volatility.

[ricklths80]

I agree with you that the margin is very important but lets keep it real. With a large cap company that shows a profit of 5bil then 5% of that would be a very large number (250mil). With HHSE a profit of 351,687, 5% would only be 17k, so don't make it seem like there profits are reducing by a ton, 17k could of been almost any type of expected or unexpected expence.

[ricklths80]

I agree with you that the margin is very important but lets keep it real. With a large cap company that shows a profit of 5bil then 5% of that would be a very large number (250mil). With HHSE a profit of 351,687, 5% would only be 17k, so don't make it seem like there profits are reducing by a ton, 17k could of been almost any type of expected or unexpected expense.

[Fuse78]

You have a point there but honestly I'm just happy they turned a profit. Being supercilious over a few %'s right now shouldn't even be the focus, whether you've ever ran a business or not....buy the way.
The main concerns I have is that they turn a profit and get the dang AUDIT to verify it. That way I'll know if these guys are full of it or not. At that point, all I hafta worry about is their competence.
Nevertheless, I do believe this company has potential.