If you write up a list of Pro's and Con's for HRL, everything seems weighted to the good things when I do this..
Pros:
Very tight register Management and Board close to 50%
Loan facilities if needed (but undrawn)
Exposure and contracts in current high value projects (Mr Fluffy etc)
Contracts with Governments and big organisations in multiple states and countries.
Roll-up model to some extent, but early stages where arguably the most value is obtained.
In a niche, perhaps boring but definitely growing sector. Both the drug screening and asbestos.
Both key markets will no doubt grow in coming years as compliance and legislation increases
Even at early stages bringing in real cash, nearing cash flow positive even after acquisitions and new offices
Climate changes and natural disaster mean more tests needed.. more business
Negatives:
Time until big profits - maybe to long for some.
Legislative risk - maybe things will become even more onerous and expensive.
Competition and general economic activity.
Anyone help with others?
$17m Market Cap, looking at $10m revenue this YTD and growing nicely.
I'm puzzled as to the lack of buying interest when this does look like it is on the way to a real and profitable business group. Reminds me of MNF back 10 years ago, my first multi-multi-bagger that just never stopped going up. Un-sexy space at the time but astute management just did their thing, quietly in the background and then one day, the market realised and management were running (and owned a big chunk of) a business worth hundreds of millions of dollars.
HRL Price at posting:
11.0¢ Sentiment: None Disclosure: Held
