This company has been on my watch list for quite some time. It disappointed the market last week with its announcement of a negative revision to its financial outlook. Like most IT companies it has experienced a very soft 13 fist half.
Over the last year the share price has rolled over as EPS contracted last year and looks set to contract this year too. That said, dividends are forecast to remain stable. It is a very stable dividend payer and EPS are forecast to be adequate to cover dividends while cash flow should remain positive.
Billing software, which HSN specialize in, is a fairly defensive market. Utilities tend to bed down and stick to their billing systems. Growth in smart metering should provide potential market growth for HSN amongst utilities in the medium to long term.
I believe this stock could be undervalued by the market and will keep watching for a turn around in share price and positive momentum.
Be the first to comment