3SOF

New IPO doing very well. Preparing for a breakout and a retesting of the August highs soon.

HWCC coming back for another stab at all time high's with 2 long green daily candlesticks. Miight be one to keep an eye on.

Houston Wire & Cable may have a Texas name, but it can keep customers wired from Seattle to Tampa. The company distributes specialty wire and cable products such as cable terminators, fiber-optic cables, mining cable, and bare copper and building wire, as well as voice, data, and premise wire. It also provides cable management services (a custom program designed for wire and cable requirements) and an asset-management program (for the development and management of inventory). Houston Wire & Cable, which is 76%-owned by investment firm Code Hennessy & Simmons, operates 11 regional distribution centers and sells primarily to electrical distributors.

I've placed the new IPO,  HOUSTON WIRE & CABLE, back on my 'watch it close' list once again. Having traded it twice already, last time blindly following it all the way to the lower trendline and then back up again before selling close to the high on 21Nov.

Friday it bounced off the 50dsma. Now I'm awaiting confirmation one way or another tomorrow. Lower trendline is around $21. 62 if it continues trending down. Around $25 when it goes back up to the upper line. I'm certain some of you could evaluate targets much better than I. I'm cool with that. And would welcome it.

Institutional Shareholders (per http://www2.barchart.com/prdetails.asp?sym=HWCC) up from 41 about a month ago.

Buyers moving in for the past week http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=HWCC&range=7&mgp=0&x=12&y=10&i=3&hdate=

Here's their last Income Statement from Yahoo:  http://finance.yahoo.com/q/is?s=hwcc

1. Introduction

Tirebldr suggested I take a look at HWCC ... generally I don't like recent IPO stocks (because most of them dilute shareholders value after the IPO), but at first sight HWCC seems different.

Let me make a complete study on the stock using my usual template.

2. Profile

Houston Wire & Cable Company engages in the distribution of specialty wires and cables, as well as in the provision of related services to the electrical distribution market in the United States. (complete profile here)

3. Technical Analysis



There's limited technical information on a stock that had its IPO just six months ago, but the standard error channel says the trend is bullish.

4. Fundamental Analysis
4.1. Number of Shares Outstanding

They just made their IPO so there's no point in making this test. With every stock but especially with recent IPO's, I urge you to keep an eye on the share count. I already see $51.4 M on their 3Q cash flow statement coming from "Proceeds from sale of common stock", that is, share sales after the IPO, on the open market. 

On November 6 the number of shares outstanding was 20,867,173, so the current market cap is 20,867,173*$23.59 = $492.26 M.

4.2. Liquidity

The company's balance sheet shows $80 M in working capital, but $0 cash and equivalents. I find this odd. The total current assets are accounts receivables of $58.8 M and inventories of $54.3 M. The current ratio, that is, current assets/current liabilities is 3.28, which looks healthy, but this lack of cash is worrysome.

4.3. Revenues



I have audited financial statements since 2003, despite the company became public just in 2006, after all HWCC exists since 1975.

Revenue trend is positive and showing strong growth. I expect 2006 full year revenues of $330 M, considering the first three quarters of the year. Sales growth is gaining momentum, it was 15% in 2004, 24% in 2005 and 55% in 2006.

The revenue multiple is $492 M/$330 M = 1.49. The Electronics Wholesale industry revenue multiple is 0.63, but the industry growth rate is just 9.4%.

So, HWCC is growing more than the industry so it has a higher revenue multiple. Makes sense.

4.4. Profits



Wow, nice and steady EPS rise. I expect EPS of $1.70 for 2006, so the Price Earnings Ratio is 13.8. EPS growth from 2005 will be about 127% and the earnings multiple is just about 14.

The industry average is 17.

4.5. Recent News

I see a director of the company buying shares between $21 and $24. Not many, but some ... that's positive.

5. General Overview

The negatives I see is the possibility of the company issuing and selling many shares after the IPO. IPO stocks are risky long term investments. The business may grow but the share price declines. I've seen it many, many times, when I look at all history charts and check the evolution of the share count.

Another negative is the lack of cash in the bank. Howcome the company sells $330 M and doesn't have $$$ in the bank? That's very strange.

As positives I see a bullish trend on the stock chart, rising revenues and profits and a cheap valuation.

Overall my outlook is positive, but I would read the entire 10-Q looking for something under the carpet. I would like to have a reasonable explanation for the lack of cash. Given that and no new shares issued on the next 10-Q and I would turn very bullish on HWCC.

Good luck to anyone holding, especially Tirebldr

HWCC has turned around from the 20dsma and moved up on higher volume.

RVBD has broke out today also on very high volume

+204% est ann earnings growth. Last Q eps +86%,prior Q +137%, last Q sales +26%, ROE 74%, PE 19, debt 15%, 12 Q's EPS>15. Looks good fundamentally, IMO.

Are you holding Tire?

Press Release Source: Houston Wire & Cable Company


Houston Wire & Cable Company 1st Quarter 2007 Earnings Conference Call
Tuesday April 24, 1:00 pm ET


HOUSTON--(BUSINESS WIRE)--Houston Wire & Cable Company (NASDAQ:HWCC - News), a leading distributor of specialty wire and cable, will hold a conference call on Wednesday, May 2, 2007, at 10:00a.m. CDT to discuss first quarter results.


This call is being webcast by Thomson/CCBN and can be accessed through the Investor Relations section on HWCC's Web site at www.houwire.com.

The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call at (www.streetevents.com), a password-protected event management site hosted by Thomson Street Events.

About Houston Wire & Cable Company:

With more than 30 years of experience in the electrical industry, HWCC is one of the largest distributors of specialty wire and cable and related services in the U.S electrical distribution market. Headquartered in Houston, HWCC has sales and distribution facilities in Atlanta, Baton Rouge, Charlotte, Chicago, Denver, Houston, Los Angeles, Philadelphia, San Francisco, Seattle and Tampa.

Standard stock items available for immediate delivery include continuous and interlocked armor, instrumentation, medium voltage, high temperature, portable cord, power and instrumentation cables, and private branded products, including LifeGuard(TM), a low-smoke, zero-halogen cable. HWCC's comprehensive value-added services include same-day shipping, knowledgeable sales staff, inventory management programs, just-in-time delivery, logistics support, customized internet-based ordering capabilities and 24/7/365 service.


Contact:
Houston Wire & Cable Company
Hope Novosad, Investor Relations Coordinator
Direct: 713-609-2110
Fax: 713-609-2168
[email protected]

--------------------------------------------------------------------------------
Source: Houston Wire & Cable Company

Support @ $27.45.......

Seems to have found support @ $27.45
Trend is up, next break should be higher.......JMHO of course
Bullish engulfing.....

This stock is now also heavily shorted.......
Shares Short (as of 12-Mar-07) 5.49M
Short % of Float (as of 12-Mar-07) 30.10%

Shares Outstanding: 20.87M
Float: 10.13M


BRIEF: For the fiscal year ended 31 December 2006, Houston Wire & Cable Company's revenues rose 51% to $323.5M. Net income totaled $30.7M, up from $12.5M. Revenues reflect higher sales attributable to higher commodity prices primarily for coppers & polymers and growth from end users market. Net income also reflects improved gross margins, lower management fees and decreased depreciation & amortization expenses. http://www.houwire.com

Quote from: BigSully1 on April 25, 2007, 02:27:54 PM
+204% est ann earnings growth. Last Q eps +86%,prior Q +137%, last Q sales +26%, ROE 74%, PE 19, debt 15%, 12 Q's EPS>15. Looks good fundamentally, IMO.

Are you holding Tire?

Of course, that is only an opinion from a quick look. On the outside it definitely looks good to me.

HWCC definately is worth another look guys!
It just broke above the Downward Resistance trend line.
Is a Zacks # 1 Stock Pick.
With an expected growth rate of more than 17% over the next 5 years and a low PEG ratio of .87

Please just take a look at it and let me know what ya think 

I have been watching a company: Houston Wire and Cable Co. Ticker (HWCC)

The reasoning I have that there will be a squeeze is this:

Earnings Release on August 1st.
(HWCC) apparently was driven down by a competitor company (WCC) earning's report.
JFYI... (WCC) Has missed their quarter two times in a row...
HWCC have beat their quarters by a decent margin in the last 4 quarters.
Short % of Float is 30.80%
Short Ratio is 14.7
PE  of 14.2
FPE of 12.2
PEG OF 0.81
Just coming out of "Oversold" conditions on the charts.
Was one of the few stocks that was up in yesterday's ugly market.
Zacks Rank of 2 (BUY)

I have attached a chart of (HWCC) coming out of "oversold" and the short interest. Everything looks juicy to me

This News just came out today on HWCC:

"Seeking Alpha
Houston Wire and Cable: Not a Typical Distributor
Wednesday July 25, 6:00 am ET

Alan Brochstein, CFA submits: Everyone has a closely-followed hugely successful stock that has somehow perpetually eluded becoming a part of the portfolio. You know what I am talking about. The company that you admire, but whose valuation (too high or perhaps even so low that it seems like it is too good to be true), stock appreciation or some other factor has always prevented you from buying. And you just kick yourself.
 
Well mine (the one to which I will admit today) is Anixter (NYSE: AXE - News) (86.11, $3.2 billion). I have followed that stock closely for quite some time and actually have apologized in the past to the CFO for meeting with him and not buying the stock, clearly having wasted both of our time. Without going too much into the AXE story, I have always been impressed with the industry (specialty and coaxial cable and wire distribution) as well as how well run the company has been. Having gotten to know other distributors very well, such as those in the IT products area or Pharmaceuticals, I have a special appreciation for this industry, as it offers much better dynamics for the middle-man.

I recall the last time I met with the CFO of AXE, he asked me (being that we were in Houston) if I was familiar with a local company, Houston Wire and Cable (NasdaqGS: HWCC - News) (24.83, $520mm). I wasn't. He indicated to me that they were a fine company, though much smaller than AXE. Six months later, I heard the name again, as the company was conducting its IPO. It was too small to meet the investment criteria at the firm I was employed, so I didn't really get to know it. Well, now is the time. Though the stock rocketed from 13 to a high of almost 32, it has pulled back sharply lately. I have spent some time over the last day trying to get my hands around the situation, especially as I like a lot of things about this company. From the best I can tell, there are only two things going on that are impacting the price: Nervousness before the 8/1 quarterly earnings release and perhaps some selling by some IPO investors who reached the LT capital gains threshold.

I will skip a full description of the company and instead point to some interesting highlights. For those who would like to quickly get a handle on the firm, their website is a good starting place, particularly their investor presentation. Here is the good stuff:

Stellar Balance Sheet: ($6mm of LT Assets, Total Liabilities of just $34mm)
Very Low PE ratio
Magic Formula top 100 (not surprisingly – makes my "Magic 500" as well)
Rising EPS estimates
Closest Peer (NYSE: AXE - News) blew away numbers today and rallied
Two Directors buying stock recently at slightly higher prices (one comes from Pool Corporation (NasdaqGS: POOL - News), another great distributor)
Neuberger Berman recently established a 15% position from scratch
Leveraged to Utility and Infrastructure build-outs
Covered sparsely by Wall Street (5 guys)
Large short-interest
Sitting on top of strong support at 23-24
Game plan: Strong company in a great industry at a fantastic price. I think that the stock could trade back to 30 or so, as that represents a multiple of just 15X the 2008 estimate. If you are going to be a distributor, this is the type of business that you should seek: Being in the middle of lots of buyers and sellers (so as not to be subject to getting squeezed by a few big customers or vendors). I will not sit by idly and watch this one keep going up!"
http://biz.yahoo.com/seekingalpha/070725/42252_id.html?.v=1

Please let me know what you guys think.

Maybe this will get your attention on HWCC
I am so glad I found this info.
I thought I was going crazy buying a bucket load of HWCC at $24.87, but it turns out the institutions are buying as well this week before the AUGUST 1st earnings

http://investing.businessweek.com/research/stocks/ownership/institutional.asp?symbol=HWCC.O

Wxmang, I think you'll do just fine with HWCC  at this stage as long as you don't get too greedy.  I am holding a little of it and just might buy a little more.

You quoted Alan Brochstein in regards to AXE, the world's largest distributor of cable and wire products.  They just again exceeded estimates with a 33% earnings increase. I missed AXE's report until you drew my attention to it. Applaud for that. Should bode very well for HWCC.

As to the insitutional interest in HWCC, there's a point where too much can become troublesome, IMO. They could be shorting against the box, using other hedges,  loaning out the shares for shorting for a fee, or ready to lock in some profits, etc. I prefer to have about 30% institutional interest and growing. Otherwise, who is left to buy?

I like to see Royce as a major holder in it though. Somehow they are major holders in many of my picks that do very well.

There's still another message board for HWCC, you might find a little more info there. Sometimes it's very hard to get a response from others even though your input is appreciated (at least by me), especially when you lay out your case like you did. Thanks and I'll applaud you again later when I can.

Thanks BigSully1 for the nice comments
For some reason I thought you were going to be pessamistic about HWCC. hee
Here is yet another thing I love about HWCC...
There are only 4 Analysts covering the company and this is the time you want in.
Before any upgrades... And that Growth is pretty nice too at 17%.

Check out today's "V Bottom as HWCC tested the low of early this week.

Wx

P.S. I am so friggin glad I sold my entire 3stocks portfolio a month ago.

"HWCC" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders.        
All history on a stock pick in 1 thread is awesome.       

Thank You....and good luck with all your trades....make some $$$ 


I will leave you the chart while I am in this thread.....
Below is the 1 year chart...