Decided to do more research - Picked up two products that actually measure different variables. I have used one Skaffold and the other Vector. The Vector report says its undervalued but it has it recommended as a sell. I looked further the issue is transformation as it looks backwards to see how the company will look forwards so DG - dividend growth is bad given its past. CI - comfort index - "CI (Comfort Index): CI is an indicator which reflects a stock's ability to resist severe and/or lengthy price declines.HIL.AX has a CI rating of 0.67, which is poor on a scale of 0.00 to 2.00. CI is quite different from RS in that it is based solely upon a stock's long-term price history. VectorVest advocates the purchase of high CI stocks."
The other area is that its defined into a business sector called industrials capital goods.
Overall I think all these identifier type systems look for undervalue but cannot take into account a past and a transformation or recovery stock. On that basis I think it identifies those far to late in the cycle. Take AOG for example I started buying that at around $1.12 upwards to average at around $1.38. Not enough otherwise I wouldn't have to still work. However I could see that if you waited a few years the transformation would provide a great value increase. Its now doing just that at around $2.30 with I think still some to go.
It forms part of the ASX 300 so is in there but not a 200.
I think it has some risk and some that normally would unsettle me - past management performance. really I can only hope that the past education has given him some added skills.
I wont sell but I am a little more wary than I was. Great opportunity can present management deliver the goods or are they optimistic and overpay for acquisitions?
HIL Price at posting:
$1.62 Sentiment: None Disclosure: Held
