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When Should You Buy Harte Hanks, Inc. (NASDAQ:HHS)?

·3 min read

Harte Hanks, Inc. (NASDAQ:HHS), might not be a large cap stock, but it led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Harte Hanks’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Harte Hanks

What's The Opportunity In Harte Hanks?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.18% above my intrinsic value, which means if you buy Harte Hanks today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $13.25, there’s only an insignificant downside when the price falls to its real value. What's more, Harte Hanks’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Harte Hanks generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Harte Hanks, it is expected to deliver a relatively unexciting earnings growth of 8.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Harte Hanks, at least in the near term.

What This Means For You

Are you a shareholder? HHS’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on HHS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Harte Hanks as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Harte Hanks has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Harte Hanks, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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