here is my take on this. with the PPS at about 1.90-2.00 dollar and there high was at 5 dollar before the EPA came out in JAN. when the EPA comes out and continues the cut backs the price of R-22 will go back up and lets be conservitive. hdsn could go back to 4 dollar, where do you make 100 % on your money in a year. if you buy now and hold for a year it will help on your taxes. this is a great price to buy and hold for a year even if it goes to 3 dollar 50% return I will take it all day long.
No reason whatsoever this stock is going up and that is based on facts at hand and for the next 12 months. No earnings upside with the squeeze taking place due to latest EPA decision. Simple as that, unless you like tying up good money for ??????
now that the inventory writedown is behind them ----- i hope, we should get back to positive earnings, so on one hand i can't really see another decline of any significance. however, i also don't see much of a catalyst to propel the PPS much higher either for awhile.... i would love to see a steady climb back to 3 bucks, but i am not holding my breath until we get further into 2014. i keep hoping for an acquisition ---- HDSN has decent liquidity so perhaps they are looking at strategic acquisitions as well as expand their european business.. we need R22 inventories to come down and that will just take awhile....
Absolutely no reason whatsoever for this move upward. Should have went the other way. R22 restrictions lifted for and thru 2014 meaning - no reason to purchase at these levels - but in 2014 you can add - half way thru (if EPA doesn't come up with another surprise ruling on R22 production restrictions) I own this but you can't figure on EPA backtracking with logic for elimination of R22 production. So you wait. I posted this when Air Gas posted their earnings and the same verbage was used by HDSN when explaining present earnings. Buying at levels above 1.77 (day of earnings price is insane) Plain and simple
So, they got the financial covenant default waivers from their lender (of course -- no surprise) in exchange for a higher interest rate... and perhaps a fee which was not disclosed in the press release, but would be in the complete waiver agreement. Seems the projections for next year will get the EPS back on track.... let's hope the EPA has a change of heart ------- but i doubt it...
I didn't bother to look at the detail P&L, but I may see what the adjusted net profit/loss would have been by excluding the invertory writedown....
Correct me if I'm wrong, but isn't the R-22 ruling the following? "According to the Final Adjustment Rule, R-22 allowances for 2013 will rise by about 13% relative to 2012, and decrease by 20% in 2014 relative to 2012."
With R-22 allowances 30+% below 2013's that should give R-22 prices at least a modest boost. With R-22 prices in 2013 plummeting, I'm assuming that demand for R-22 was strong, as it was easier than expected price-wise to refill your commercial or residential AC rather than buy a new R-410 or other AC. HDSN's sales numbers in Q3 seem to indicate that. So there'll likely be less holdover R-22 inventory from 2013 heading into 2014.
So while I see no reason to buy HDSN north of $2 right now, I don't think we can dismiss HDSN in 2014.
$14.7 mm non recurring charge. They had positive earnings of $2.5MM in the worst environment. Can you imagine what they will be earning in a few years when EPA reduces volumes. In 6 years no more R-22 so they will be earning $2/shr.
I'm guessing the non-Gaap numbers impressed some. I'm undoubtedly reading this wrong (please correct me) but it seems like they wrote down a lot of the R-22 inventory for tax reasons (tax benefits will likely carry over into 2014) and probably a sense from the overall market that the worst is over. Q4 always stinks for them and so the street has no expectations for the current quarter. A lot depends on the EPA in 2014 and how the R-22 market responds. I'm curious what tax-loss selling will do to HDSN in the coming ten weeks. Could be some opportunities to get back in/average down depending on your situation.
Conference Call should be interesting.
Their inventory needs to be written to the lower of cost or market value in accordance with GAAP. I don't think they have any choice. They should get some benefit from tax loss carryforwards in future periods...
Without some merger or acquisition, I don't expect to see that 5 bucks again for a long time.... but hopefully it can at least make some steady moves up into the $3's next year.... just my view... It's on the back burner for me now... good company ---- good mgmt ---- just got screwed by the EPA --- probably some cronyism in their decision.... maybe they bowed to some pressure is my guess... I certainly didn't plan on holding this until 2019 but i'll be happy for high $3's next year.
No, I think you're reading it correctly. I thought the same thing, but still, based on past market reactions this completely surprised me.
I wonder if the momentum will carry through to tomorrow?