SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : HMT Tech..281% sales growth at a trailing PE of only 17
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: grace who wrote (299)10/22/1996 12:48:00 PM
From: Bill McCullen   of 317
 
TO ALL:

Here are some details on H&Q downgrade of HMTT based on a discussion
I had with my broker there:

- Reported earnings of .38 per share include a tax related one time
gain of .06 and an additional gain of .04 per share due to a long
term change in tax rate from 38% to 30%. Without these gains
HMTT earns .28 vs. H&Q expectation of .35.

- H&Q expected revenue of $76M vs. the actual of $62M.

- H&Q is revising revenue projections downward but leaving earnings
projections the same as the long term change in tax rate will offset
the reduction due to slower growth than expected.

- H&Q cited some "confusing statements" made by the company during the
analysts' conference call.

- H&Q view HMTT long term prospects as positive and recommends buying
on a pullback. Maintains '98 earnings estimate of 2.15 per share.

Some of my comments:

- I am suprised that the tax rate reduction wasn't already known by
Wall Street analysts.

- I am worried about the "confusing statement" part of the commentary
and believe that this may have led to the downgrade.

I am amazed that H&Q can rank a company trading at 9 times 1998
earnings as a hold. It seems that H&Q may have already created the
pull back (buying opportunity??) they cited by downgrading the stock.
A downgrade from H&Q is particularly significant since I believe they
took the company public.

I am worried about the revenue shortfall though encouraged by the
margin improvement. It seems that HMTT is a buy at 15-16 but wonder
if there is any rush at it might trade in the 13-17 range until next
quarter's results clarify where this company is headed.

I am interested in other opinions.

Regards,

Bill
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News