HSN (ASX) Weathering the squalls

Originally posted by thunderhead1 ↑

A snippet from OC, who sold out of HSN completely in June -

Hansen (HSN, -23.0%)
was the key disappointment for
the month after it provided a negative earnings update
for the year to 30 June 2018, as well as providing softer
than expected guidance for FY19. HSN provides mission-
critical billing and customer care software solutions to
clients within the pay TV, telecommunications, energy
and water sectors. It is a global business that has grown
rapidly over the past five years driven by a combination
of sensible acquisitions into new geographies or
complementary vertical adjacencies and steady mid-
single digit organic growth. The business was thought
to be quite predictable given the very low churn rate
amongst the customers and the revenue model which
we believed to have a high degree of predictability
given the sticky customer relationships. That thesis now
looks flimsy, particularly in light of the FY19 revenue
guidance which suggests to us that the lower quality
project based revenues may be higher and more
volatile that the market (and ourselves) had previously
anticipated. Not helping matters Managing Director,
Andrew Hansen, sold down his position in the company in
March 2018 which, at the time, we dismissed as sensible
diversification. But the optics of the sell-down now look
bad, given the quantum of this downgrade. This has
no doubt exacerbated the angry selling from investors.
OC Funds was on the front foot when the downgrade
was announced and was quick to push the sell trigger
exiting a large portion of our stock well above the current
share price. When the facts materially charge so will our
investment thesis and we have now exited the position.

Expand

Never heard of OC Funds, but my initial view would be: 1) they don't spell check their corporate releases/comments and 2) it appears they did next to no analysis other than react with 'oh sheet, that's a curve ball, sell everything'...they sound like the average ASX punter.
It's clear they've not studied Hansen's business model or business well enough, nor have they considered that businesses from time to time encounter hiccups. The last hiccup Hansen encountered was earlier in the decade and it proved to be an exceptional buying opportunity.

Thank you OC Funds (whoever you are) for selling me your shares on sale.

No.	Vol.	Price($)
3	4028	$5.48

No.

Vol.

Price($)

4028

$5.48

Price($)	Vol.	No.
$5.53	1828	1

Price($)

Vol.

No.

$5.53

1828

No.	Vol.	Price($)
1	390	2.890
6	15920	2.880
1	2412	2.870
2	4900	2.860
3	12531	2.850

No.

Vol.

Price($)

390

2.890

15920

2.880

2412

2.870

4900

2.860

12531

2.850

Price($)	Vol.	No.
2.900	533	1
2.920	16320	7
2.930	25026	5
2.940	23325	5
2.950	10622	3

Price($)

Vol.

No.

2.900

533

2.920

16320

2.930

25026

2.940

23325

2.950

10622

(20min delay)
Last $5.50		Change 0.050(0.92%)		Mkt cap ! $881.1M

Open	High	Low	Value	Volume
$5.55	$5.59	$5.46	$1.686M	305.9K

Never heard of OC Funds, but my initial view would be: 1) they...

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