Major Earnings Growth in This Market? Now That’s News

Hurricane Sandy has got the stock market closed, and some companies are delaying their earnings reports. In this kind of stock market, growth is becoming a difficult thing to come by, whether it is revenue or earnings, large- or micro-cap. Business conditions are difficult, and risk aversion in the stock market is going up. You can see this in the bond market.
One micro-cap company that’s worth following this week is Hudson Technologies, Inc. (NASDAQ/HDSN). Based in Pearl River, NY, this small, but growing company operates in the refrigeration industry, helping contractors, wholesalers, and equipment manufacturers service and maintain refrigeration equipment. Off the cuff, the refrigeration business isn’t the kind of industry that you immediately get excited about, but according to Hudson’s numbers, it’s a darned good business to be in right now. What Hudson Technologies looks to be is a major turnaround situation. On the stock market, the company’s share price has been in the doldrums for years, and only recently has it turned higher after reporting great second-quarter earnings.
According to the company, its second quarter saw revenues jump 51% to $22.3 million over the comparable quarter. Second-quarter earnings improved substantially to $5.1 million, or $0.20 per diluted share, up from $781,000 or $0.03 per diluted share in the same quarter last year. For the first half of this year, total revenues grew 30% to $37.1 million, while earnings increased to $7.6 million, or $0.29 per share, up markedly from earnings of $1.87 million, or $0.07 per diluted share. The company is supposed to report its third-quarter earnings this Wednesday, and I expect the stock to move on the results.

I love finding small, growing companies like this on the stock market. I like finding small companies that are run by the founding entrepreneur, and inside share ownership is high. It’s been tough to find meaningful growth in revenues in earnings in this economy, and especially earnings growth in small- and micro-cap companies. Smaller businesses are more nimble, but they don’t have the ability to maintain their earnings in recessions like large-cap companies.
Trading action in the broader stock market is likely going to be difficult this week. Economic news has actually been improving in recent weeks, but investor sentiment has not.
Source: http://www.pennystockdetectives.com/