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Hudson Technologies Inc. Message Board

  • myownstimulusplan myownstimulusplan Feb 28, 2014 8:48 AM Flag

    If there is an end date for production of virgin

    and there will still be huge amounts of AC equipment that only works with R22 one would think the demand for reclaimed R22 will exist for years and years. So why not buy now hold for years and wait for a huge return?? I am told that this R22 has years and years of life and replacing all this equipment equipment will take huge investment and that in the real HVAC world the so called substitute gasses just do not work nearly as well as reclaimed R22 . What am I missing ?????

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    • Hello my - In my opinion, you're not missing anything....long term. The EPA will phase out R-22 by 2020 and Hudson's business plan is to capitalize on this development by reclaiming old R-22 and cleaning it up. The problem right now is short term. The bulk of revenue and profits in 2013 came in the 1st quarter when there was a perceived shortage of R-22 and the price was well above what it is today. The final 3 quarters of 2013 were spent basically flat to down. Hudson got hit with a double whammy...EPA provided higher than expected % of new R-22 that could be produced and the summer was colder than normal. The price of R-22 collapsed and Hudson was pretty much forced to to do a write down of their inventory in the 3rd quarter. Now, rather than a perceived shortage of R-22, you have an actual glut of R-22 across the industry (it wasn't just Hudson that was affected). The question is who will be the first supplier to lower already low prices? Will buyers wait to see where the price for R-22 settles or will they buy during this normal buying season? Will cold weather again affect demand or will the summer be hot? All questions that can't be answered yet. How many times in the conference call did they say it would be several quarters before this works itself out? They also pretty much warned us that 1st quarter results will not compare to 2013. Weather again is playing a part as the normal season is starting later...as they also pointed out more than once in their conference call. A transcript is available right on this site and I would strongly advise you to read it. As for myself, I have bought and sold this stock many times over the past few years at a profit. Currently I hold no position but will buy back at some point ...maybe later this year. You can read my previous post from Feb 7th when the stock price was at $3.60. I wish you luck here and these comments are my own. I hope i am wrong about 1st quarter earnings but I see and hear warnings.

      • 2 Replies to stocktivity
      • You can try and time the stock but R-22 prices change quickly. EPA is now faced with a new report of ozone depletion again accelerating. They will be criticized for allowing such high production in 2014 and will cut back. This will cause hording from dealers. Whether this happens this year or next, it will happen. When it does, R-22 prices will soar and the stock will be in the teens. At $3, it is very cheap. Buy straw hats in the winter.

        Sentiment: Strong Buy

      • i've owned this since 2008.... have no intentions to sell for many years.... to me this is one of the very few low cap stocks i bought with the express intention to hold it a long time.... it will gyrate for awhile for all the reasons you mention.... but the fundamental fact of the R22 phase out will drive earnings & pps higher over time....IMO.
        i would not be surprised to see the pps drop under 3 --- maybe a lot under 3 this year..... but it would not bother me one bit...
        I guess it all depends on what your time frame is.... i just don't see any real LT downside... In fact I keep waiting for them to make an acquisition or perhaps a merger... I never understood why they took such a large LOC with their lender when they never borrow that much, even for seasonal needs....plus the shelf reg awhile ago... Of all my positions, this is probably the only one i never worry about....

        Sentiment: Hold

 
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